Liquidation disaster

pcwSg
2023-04-01

Using Tiger for 0DTE option buying strategies, just to speculate when i have a strong view on the market and if the premium is reasonable. [Allin] [Allin] 

Bought a SPY 408-409 CALL spread for 0.07 (0.15-0.08), expecting the market to continue creeping upwards. [Call] [Call] 

However, it got liquidated for 0.30 (0.67-0.37) when it would have been a full 1.00 profit at expiration since SPY closed above 409. [Facepalm] [Facepalm] 

The worse part, it also sold off my auto-invest position in $Devon(DVN)$  [Helpless] [Helpless] 

Seems like just parking small money in a small Tiger account to speculate is a bad idea... Auto liquidating all my assets may be a sign too...

Been participating in community events mainly for Tiger gifts, got 1 towel for sacrificing sleep and being first to find one of the HAPPYCNY cards. [Spurting] [Spurting] 

Guess enough losses has been made...

Time to focus on what makes money instead of burning money here... [Blush] [Blush] 

Facing the losses, nearly $9k SGD in losses in total

Just for memories sake, would let it freefall from here on out.

Still, would be actively looking out for promotions, just no more community events and trading here...

Hope to see an event worth writing about soon [Wow] [Wow] 

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Comments

  • Yonhuat
    2023-04-01
    Yonhuat
    That’s ODTE for you. At 1 hr before market close and price cross your option call mark. liquidation is auto because the account cannot make the share purchase as it went ITM
    • SullivanRrr: 
      So you still won money on this trade? Your cost for the call spread was 0.07 (0.15-0.08), while it got liquidated for 0.30 (0.67-0.37)... Am I right? 😳 @pcwSg
    • pcwSg: 
      yep, understand that it is the broker's right, and to prevent negative balance and possible bad debt from the volatility... woes of small acccount and playing with fire [Facepalm] [Facepalm]
  • LMSunshine
    2023-04-13
    LMSunshine
    Curious…so is it an app issue that your options got liquidated and your Auto-Invest Devon got sold off? I‘ve never had my Auto-Invest stock being sold off but have whole loads of other app bugs
    • pcwSgReplyLMSunshine: 
      its fine, just some small money, not big issue.
      dont think they will "replace" the shares per se... likely they will just explain why they liquidated it.
      but still hope the liquidation process can be improved to not affect other positions
    • LMSunshineReplypcwSg: 
      Then did you contact customer service for help? If they made a mistake, shouldnt they replace your Devon shares?
    • pcwSg: 
      the liquidation of Devon is not logical, they should not touch and auto sell my other positions, they should only auto close my 408 and 409 option contracts
    • pcwSg: 
      therefore, they sold 408 contract at market price, and bought back the 409 contract at market price, for nett 30USD.

      if they didnt liquidate my positions, the 2 contracts would be worth 100USD at the end of the day

    • pcwSg: 
      short story long...
      it got liquidated because i dont have enough money to support the option exercise if SPY stayed between 408 and 409.

      i would need 40k USD to support the exercise

  • NiceOne
    2023-04-01
    NiceOne
    Quite an extraordinary analysis, man. You're amazing!
  • ChrisColeman
    2023-04-01
    ChrisColeman
    Do you think trading options is suitable for new investors?
    • EatmiReplypcwSg: 
      同意你的说法。
    • pcwSg: 
      would say buying options blindly will always lead to 100% loss.

      selling options would be a good idea for new investors to get used to how options work, but selling only tight spreads and/or with proper stop losses in place to prevent big losses would be my advice for new investors.

  • WernerBilly
    2023-04-01
    WernerBilly
    Yeah, you are right. Liquidity is a big issue.
  • Eatmi
    2023-04-03
    Eatmi
    Learning about investment strategy
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