I capitulated on a bear put spread in VXX.
music selection: “With A Little Luck” — Wings
On 12FEB2020, I entered the 16/17 strikes VXX bear put spread (28FEB2020 expiry) for 92 cents a share. I bought 20 spreads. On 20FEB2020, I began to rethink the wisdom of a short term trade in contango with such little upside potential and asked 96 cents to close the spreads. I got that on 5 spreads and probably should have taken 95 cents to close the entire lot.
Corona Virus has the markets in a nose dive and VXX is spiking. Now that the spread is completely out of the money, I decided to take anything I could get rather than risk a 100% loss. I got 29 cents for the remaining spreads today. My net loss is 1,795 on 1,840 capital at risk.
I continue to hold the underlying shares short and will continue to hold my 13 strike put with 21JAN2022 expiry. I expect both to finish well in the green by the time I close them.
I don’t like blogs that report their winning trades and just sweep the losing ones under the rug. I think that gives a false sense of what can be achieved (and what is at risk) with active portfolio management. I think my overall results speak for themselves but it is also clear that I am a fallible lizard who sometimes steps in bronto sp. poo. Hope you find the transparency useful.
Devour your prey raptors!