My balances are absolutely savaged and I am having to take emergency measures.
music selection: “You Can Do Magic” — America
I made some missteps this year. The first was hanging onto a short of TSLA far too long. I lost about 75,000. The second was deciding to hold MRRL without a stop loss in the belief the rising distribution rate of falling REITs put a floor under them. It is trading at 65 cents (and I bought it for 16.00). I’m down about 28,000. Add in other losses to my main trading portfolio and it is down to 74,000.
I use the “portfolio margin” feature at IB and am locked out of trading until the balance is over 100,000. I am taking emergency measures. My IRA account is also savaged by recent volatility. I liquidated positions in alphabetical order until I raised 63,000 in cash. I’ll be withdrawing 50,000 and paying the taxes and penalty for early withdrawal. I’ll then be transferring those funds into the main IB trading account to allow future trades.
With many positions stopped out, I no longer have the passive income to support my full baseline budget. This is an undesirable position to be in. I’ve been thinking about part time work for some time to make a little fun money. This may force my hand.
I am stopped out of TWO, HNW, PCI, OXLC, NVG, REM, IIM, GPMT, and AVK. Losses are high.
I’m not panicked yet. My backup plan was always to liquidate the IRA and that plan is in progress. If things go as planned, I’ll refrain from trading for another couple weeks while I wait for volatility to subside (hopefully, things return to normalcy soon and the worst is close to priced in) before resuming trading. I’ll trade on cash and not margin (the 80k margin loan after the TSLA disaster is really killing me.) That will limit how many spreads I can trade and thus limit my income. I’ll trade deeper in the money because I don’t have much room for risk assets and thus have even lower income. But I think I can still claw my way back out. Wish a lizard luck.
Devour your prey raptors!