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The market has done exactly what I hoped it wouldn't after these positions were opened. It's been a rough start and today doesn't seem like it'll be much easier.
Contract: OESX5 P1700
Quantity: 100
Premium: $4.15
Days to Expiration at Open: 95
Initial Margin: $800
Days Open: 0 Current Margin: $892
Contract: OEWX5 P1650
Quantity: 45
Premium: $2.90
Days to Expiration at Open: 95
Initial Margin: $608
Days Open: 0 Current Margin: $684
Even with the 2 big down days right after the positions were opened the margin increase wasn't too bad. I keep wondering if it would have been a better idea to wait until the Fed minutes were released before opening this position but then this old quote from Yogi Berra popped into my mind.
"It's tough to make predictions, especially about the future."
You're right, there's a typo there. The 1650 position is the same contract as the 1700, I changed the quote.
As far as an update..it's been a brutal, brutal day and after hours seems to be carrying the trend down to 2009. Not sure how much further this will go but the margin on my current position is given above. I have to say I'm more than a little nervous with all the news seeming to encourage the downward movement. Not sure where the bottom of this is...I'm hoping it stays above 2000 but who knows. Of course this had to happen 3 days into the new position.
Extremely unfortunate, but I suppose if you need a silver lining, if you stick to the probabilities game - which options is technically all about - then at least you should have an increased positive expectancy in the near future.
I would also say that this move has been a little exaggerated. If we are to believe that it is due to the Fed Sept rate hike, then delaying it should be positive for equities + bad for the USD, whilst remaining on track for a Sept rate hike should be bad for equities and good for the USD. The fact both are lower with bonds/metals higher gives the indication of fear. Moves like these usually end following capitulation.
Then again I'm no psychic and markets can remain irrational when fear/greed is high, especially as overnight moves seem to have been worsened due to fears concerning China's growth.
Looks like we're at a near term capitulation point. The VIX term structure has inverted to a level not seen since last October 2014. Hope you guys will all go through this with contained damages. Like I said over and over, August, September, and October are the three worst months to sell naked ES. Market will bounce in coming days and will probably be setting up for a big decline in September/October. We will have another chance to get out before things blow up.
