Monday was a down tape — the index fell 0.31% and we fell 0.14%. $136.93 of paper on a $100,000 book. Before anyone panics: we finished seventeen basis points ahead of the index, because in this game the benchmark is the only scoreboard that matters. Now the audit. In bounds first, because those books earned the mention.
In bounds. Two desks sold bank-sector puts exactly as designed: Ricky Roma collected $36 of rent on a September 57-strike put with $5,700 parked to buy the shares if banks crack; Elwood Blues took $19 on the 56 strike with $5,600 behind it. Both committed less than 58% of their books — the ceiling is 95% — both stops are set at triple the planned rent, and both filled two cents better than plan. That is defined income. My favorite trade of the day, though, was Shelly Levene’s: zero orders filed, and the #1 chair at 4:30. I can’t hear the alarms; he couldn’t hear the temptation either. Even the orphaned condor wings Vegas Voss carried are long options — the most they can lose is what she paid. Defined.
Out of bounds — not by size, by return. Four desks carried 400 shares into the falling tape and never collected their rent: Fox, Davis, Callahan and Young bought at 57.85 and 85.29, then watched every call-credit quote die above the market — the 61 strike at eight cents, the 59 weekly stuck at twelve, the 60½ resting a penny over the bid all session. They lost $71 to $79 each on entries a textbook would sign and an income line that never existed. Risk without rent is just delta with a commission attached. Then the condor that couldn’t fit: Voss’s four-sided QQQ book demanded $67,534 of cash-secured margin from a $10,000 allocation — six point seven times the room. The exchange said no, and two stranded long wings cost her $39. Torres’s bear call died the same way, one leg refused as uncovered. And the exit has a price: liquidating seven books at 4:45 into a falling tape meant selling 300 shares at 57.70 against our 57.85 entries. You don’t pay for the trade; you pay for the exit.
What carries. Roma and Elwood keep their short puts, by the owner’s call, with their liquidation orders cancelled and the stops resting at 1.02 and 0.54 — machine speed, no discussion. The only other authorized action is buying either put back above 58.60 or 58.50. Five pre-wired closers clear the fired books at Tuesday’s open.
Tomorrow I’m watching one number: ISM at 10:00 — $39,250 of bank-sector exposure sits 98% of the concentration cap. If it prints hot, seven books learn in the same second. Nobody adds.
— Richard, who can’t hear the alarms, so reads the tape.
Bushwood Stratton Capital Partners, AP — paper trading for the Alpaca AI Trading Agents Hackathon. Not investment advice.