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That's my point. If they are negative equity that doesn't happen. FCM will liquidate everything as fast as possible. FCM's concern is not incurring more losses, not getting out at better prices.
FWIW, a few traders I have talked to have their doubts about the true root cause of this blowup. The prolonged liquidation seems strange to others, too.
You can also game the system for the 2/20 structure by trading less or more...also depends on the contract for the 20% is it net profit shown on account in that month or is it the ending balance compared to last month with open positions..btw Ron that’s a lot in commissions ...wondering what astronomical amount he charged as commissions
Wow! That's a lot. I always wondered why he wasn't 2/20 like some CTAs, especially with a high probability strategy like selling options. That helps explain why.
Here is a link to the spreadsheet of positions in NG, this was for a +/- 600k account, with entry exits, for the size of account the position size is insane at over 250 short calls, true they looked very slow to address getting out of this. A lot of questions to be answered.
I looked at vol on the days this spreadsheet said it added March 2019 options in Jan 2018. There was a large volume traded on the days on the spreadsheet.
What makes no sense is selling March 19 calls for about 0.055 to 0.060 and not exiting July 2018 when premiums were < 0.020. Or exiting Sep 2018 when premiums were < 0.015.