July 11 – MAJOR pain, possible capitulation

A blood bath for the longs. No bottom in sight, however I am looking for a bounce down a bit farther. VIX nearing 30.


Today is simply a brutal day of trade. I feel blessed that I don’t trade directionally. And if I did, could I get myself to keep selling after such an amazing fall.
FNM and FRE are the major talking points. And although I am a small player I did own 600 calendars on FNM. I put some on tuesday, and more on yesterday. Then this morning the stock dropped from 13 to 6. I was thinking of my BSC trade from a couple of months back. However, I use a strategy now that is much more effective in a disaster situation. At one moment after the open I was printing down $35,000. Fortunately, I understand this dynamic as well as anyone, anywhere. That said, I still had major pucker factor.
As I said two days ago, all of my cash would come in handy as people puked their positions. And they did. During a 6 minute stretch, I had 35 fills. All of them were very acceptable to me. The pain is great, and I have been fluctuating between 5-12% on the day, and 11-17% on the week. My stress level is low now that I took off 450 contract spread of FNM for very nice profits, 50-800% on my initial risk.
As I get ready to call it a day, 11am the market is falling hard. NDX down 50, S&P down 27, Dow 220, and the VIX is nearing 30. I still have 195 working orders, but if I get filled on anything it will be fully welcome.
TRADES:
FNM – 10p calendar – sold between .10 and .17, 15c sold between .17 and .50, 15p scratched between .05 and .10. I didn’t like being ITM on the 15p. After the selling I bought 2 units of 7.5p for .02.
MGM – 20p calendar bought 2 units @ even, 25p bought for .05
CAG – 20p calendar bought 1 unit @ .05.
SPLS – 25p sold for .15. The underlying is near 20, and I don’t like being ITM here. I bought for .05, so it worked out fine.

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