The RUT marches on, it’s now 16% up in 2 weeks. All the trades are suffering. The April ones don’t really need adjusting on the upside but I have to start looking at the lower Rhinos and moving them up. I bought some 1040 Rhinos for April today. On any down move, I’ll take off the equivalent amount of 920s (for something like $1). This will add theta into the trade and hopefully on any pullback we can get back to an even status. Right now we’re down around 6% on the trade (18% leveraged). That’s expected on the upside with a move like this, backtesting this in 2013 yields similar in those big big up months. Not much I really could have done and given the technicals, it wouldn’t have made sense unless in hindsight. The risk profile on the upside isn’t as pronounced as the downside, and I wasn’t in a rush to OVER adjust. I adjusted but maybe not enough. The moves happened quickly right at end of day after my adjustment time and i was slow on the draw on Mar 3 and 4 to further adjust due to the odds of a pull-back. Also patience pays in volatile periods which it was until a week ago. Obviously, this time it didn’t (at least not yet). These trades hurts the balance, it sucks but it should setup a nice trade for the following month being over-extended etc. The March I still have on are getting gobsmacked I am waiting for ANY pullback to get them off, again still limited upside risk but..still can be more painful.
I sort of expected today to be another up-day re momentum and my time frame to exit the existing March and to adjust the April trades are sometime this week but ideally on a fall either before or after the ECB meeting. We’re as over-extended as you can get so I think an uncorrected upside movement of another of above 1.5% is low. I have somewhat limited upside risk but when I say that, I mean in terms of additional losses, the more it gets up the less effective any down move will be in recovering that already existing loss. I am going to try and add more theta to the trade and put some concentration on this tomorrow and Wednesday. If it continues up and there is no pullback, I expect a really shitty month. This is I believe the strongest up move in that duration ever and if it continues, then its truly an historic event. I remain patient, though, stressed as any pullback will now be that much further away from our optimal. Trying to be patience at these nose-bleed levels. I am looking at some creative adjustments now.