Tuesday 28 February 2012

Soybean Stress (outright position over the close)

A seriously stressful and frustrating day. My soybean spread trended up all day and I went to get out in the last 10 seconds before it closes and didn't get my position off, I ended up long 5 contracts, a huge position, I had 5 by 5 on and so I closed one side of my position. I had to wait a painful 2 hours before it opened. At that point I was getting further stressed because another position was going against me and I had averaged in, a couple of hours before some biggish news and was worried I didn't have the margin when putting the position on because I thought the initial margin would apply to the soybean position, not intra day margin. It was okay, I didn't get a margin call and I aggressively scalped the spread with the second clip.

I then traded the US 10 year vs German 10 year bond spread for the first time and was legging when the soybean position was opening. I hadn't put a sell in below market to make sure I get filled on the open. The market opened and went in free fall, I sold almost instantly, missing a few ticks and it plumeted 20 ticks or so in about 30 seconds. Thank god I got out, in all I lost $400 on the soybeans.

After some survey data came out with regards to the US economy, I sold the AUS 10 year bond, to flatten my position and watched the markets free fall, I got ready to buy the US bond to exit the spread, I eventually queued the bid even whilst momentum was strong. I read the news to confirm the move was real, but then everything reversed extremely aggressively. I had to buy back the AUS bond 1 tick worse off, I couldn't believe it. The bonds just went up and up, despite the strong news which you would expect the markets to sell of on which they did but it just magically changed. It's been a while since I saw something quite like that. The markets were extremely volatile and I was flipping between AUS/US bond spread and the US/German bond spread, rolling between the spread, so at times I had a AUS/German bond spread on. I had been patient all day on the AUS/US spread buying it very low and ended up getting out of it to roll across again and missed the spike up.

Currently in one spread and fighting to get even on the day.

Update: finished positive for the day, incredibile. Made a few outright scalps and had so much fun flipping around all the 3 bond markets that I trade. I got back in the AUS/US bond spread and it gave me over a tick profit which really helped. 22 hour day, time to sleep for 90 minutes...

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