There’s not too many trading blogs out there that describe in detail just how miserable their performance is. I consider myself a trailblazer in that regard. The short correction in Dec ’18 was a huge boon for me and I was able to roll and adjust my positions in a way that put my risk:reward ratio closer to 1:10, which is crazy. The rip higher in the indices since then has put me close to max loss and at a “pain point” that makes it very difficult to adjust favorably. Most of my spreads are so deep ITM that I can’t roll out to June (from May) to the same strikes without paying and I don’t have enough capital to delta hedge. I’ve continued to put money into the account over the past few months, bringing my cash/sweep to $20,075.80.

Best case scenario, I get a good enough pullback in the indices to roll to June for even or better. Worst case, I close out my positions near May expiry and save up enough money to re open my account with enough to trade delta hedged 1-lots. I don’t really have a vol thesis since the VIX has been trading between 12 and 18 since Feb and while I feel the market writ large is overextended, I’ve been betting on that since 300 points and 3 months ago.

I’ve spent a lot of time in the books the last few months, covering the Schwager’s Market Wizards series, rereading Natenberg and objectively evaluating my strategy.  From Market Wizards I get the impression that the big boyz made their grubstake on a few well placed bets with asymmetrical risk:reward ratios and kept their money trading the traditional way preached in investing books. From Natenberg I’m reminded that a expressing a volatility view without hedging in the underlying is simply expressing a directional view. I’ve been trading like a gambler. I’ll continue looking for ways to wiggle my way into reducing exposure and back into cash. Once I’m 100% cash I’ll need to find a way to trade small enough to trade only the measure I want to, whether that be direction, vol, rates, etc. It’s a blessing to be able to see how wrong you’ve been trading, but an even bigger blessing to have the tools to work out of a bad position into a less bad one. See you in a month or two.