My worst day: −11% on April 23
An emotional two-day put on a stock mid-squeeze, a patch that made it worse, and a margin squeeze on a trade that was working. A mess all around.
I publish every red day. This is the reddest one. On Thursday, April 23, 2026, my book lost 11.0% in a single session, about C$22,600. It wasn't bad luck or a random tail event. It was a trade I shouldn't have made, followed by decisions I shouldn't have made to fix it.
The week, in numbers
| Day | Return | P&L (CAD) | NAV (CAD) |
|---|---|---|---|
| Fri Apr 17 | −4.27% | −9,091 | 203,633 |
| Mon Apr 20 | +0.47% | +947 | 204,580 |
| Tue Apr 21 | −5.69% | −11,645 | 192,935 |
| Wed Apr 22 | +6.15% | +11,860 | 204,795 |
| Thu Apr 23 | −11.04% | −22,602 | 182,193 |
| Fri Apr 24 | +4.49% | +8,172 | 190,365 |
| Wed Apr 29 | −8.56% | −16,320 | 174,417 |
From the April 16 high to the April 29 low, the book fell 18%. That's the max drawdown on my track record.
Two positions, one good and one bad
USO was the good trade. Oil was above $100 a barrel on the Strait of Hormuz disruptions, and the USO options market was deep and liquid with fat premium. Selling strangles there was a trade with a real reason behind it, and it was my largest book that month.
CAR was the bad one. Avis Budget had just gone through one of the wildest short squeezes on record: more than 500% in a few weeks, closing at $714 on April 21, on a tiny free float and enormous short interest. On April 22, I sold a $300 put, two days to expiry. It was emotional and reckless: the premium looked enormous and I took it without a thesis.
How one trade broke the whole book
- The squeeze unwound. A put I'd sold for around $13 had to be bought back at $89 the next day.
- I patched it instead of cutting it. I sold CAR calls to offset the put losses, adding more short premium to a stock nobody could price.
- The losses ate my buying power. CAR pushed the account into negative buying power, so I had to scramble to keep my USO strangle on. The good trade got squeezed by the bad one.
From April 22 to 30, CAR cost about C$16,000 in realized losses. USO added about C$12,000 in realized losses for the month, with the strangle managed under margin pressure instead of on its own merits.
What my own manual says
A $300 put two days out on a stock that had just gone from about $100 to $714 wasn't a 10-delta put. Avis also failed Layer 2 on its face: I didn't know how the name moved, and nobody did. The premium was huge because the market was correctly pricing a stock that could halve in a day. That wasn't fear to sell. It was the real price of the risk.
Then Layer 6: cut if the thesis breaks. There was no thesis to begin with. Instead of cutting, I added short calls. And Layer 7, margin is the hard constraint and it overrides everything, is exactly the rule that broke last: one reckless position took margin away from the trade that was working.
What I changed
- No short options on anything in a squeeze or with a free float too small to price, and only on names with weekly options. Parabolic means sit out, not "10-delta puts at most."
- No emotional clinging to a broken thesis. A losing position gets cut, not patched with more short premium on the same name. Know when you're beat. Live to fight another day.
- Keep a margin buffer so no single position can put the account into negative buying power or force changes to another trade.
The lesson
Short premium pays you to hold risk other people don't want. Most of the time that's a good trade. Occasionally the reason nobody wants it is that it's real. The Failure Model exists to spot those moments, and on April 23 I had the rules written down and ignored them. The rules weren't the failure. I was.
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