QuoteOriginally posted by: mcbisonbecause I m long futruresso you were long futures and short ITM puts ?

Doctor (for sanity) + Family meeting (downside too great if they are not onboard) + probably close positions. P

Very sorry to hear of your troubles. Besides what has been said, if there is the possibility that your accounts mightbe closed with a significant negative equity, then it's worth visiting a lawyer now for some advice. In the US (I know that you said you are in Italy),margin loans are generally recourse loans. This should be spelled out in your account agreement.

Do not do anything illegal. Do not do anything immoral. Do not do anything that might get you involved in a lawsuit. P

mcbison how are things now?

Incredibly after a year and a half of endless stress and a nervous breakdown I recovered 90% of my capital. I was involved in the Italian banking crisis with illiquid credit risk
Some lessons I learned
1) use collateral to operate in normal markets is fine but not during uncertainties: it add leverage and risk at risk. I used as collateral for derivatives short term bond of some Italian bank.
1) Risk and uncertainty are deeply different
2) Uncertainty is the process that takes place in tails or in the distant future and has subjective aspects that are not quantitative and are not repeatable in terms of frequency. Uncertainty is a QUALIA.
3) Payoff and leverage are crucial in situations of uncertainty or fat tails. I had only linear payoff but a lot of hidden credit risk
4) To survive in the tails I adopted a fractional kelly and avoided any negative gamma position.
5) I started to use systematically close stop loss
6) I started to reason in the short term to shrink longer dynamics, often entering and leaving the market
7) Don't listen anyone. In the storm, no one has control, thinks to survive
8) Luck
9)Trading to Protect the remaining capital: stop loss, fractional kelly, short term view
10) Trading only in Index (not single stock, not illiquid strument, not negative carry)
11) Sport, meditation, diet balanced, a lot of manual heavy work. Some beers to keep calm

Incredibly after a year and a half of endless stress and a nervous breakdown I recovered 90% of my capital. I was involved in the Italian banking crisis with illiquid credit risk
Some lessons I learned
1) use collateral to operate in normal markets is fine but not during uncertainties: it add leverage and risk at risk. I used as collateral for derivatives short term bond of some Italian bank.
1) Risk and uncertainty are deeply different
2) Uncertainty is the process that takes place in tails or in the distant future and has subjective aspects that are not quantitative and are not repeatable in terms of frequency. Uncertainty is a QUALIA.
3) Payoff and leverage are crucial in situations of uncertainty or fat tails. I had only linear payoff but a lot of hidden credit risk
4) To survive in the tails I adopted a fractional kelly and avoided any negative gamma position.
5) I started to use systematically close stop loss
6) I started to reason in the short term to shrink longer dynamics, often entering and leaving the market
7) Don't listen anyone. In the storm, no one has control, thinks to survive
8) Luck
9)Trading to Protect the remaining capital: stop loss, fractional kelly, short term view
10) Trading only in Index (not single stock, not illiquid strument, not negative carry)
11) Sport, meditation, diet balanced, a lot of manual heavy work. Some beers to keep calm

It is great that you pulled through and did not seem to do any of the things that Paul above warned about (or worse). My 2 cents:
1. Write a book about the experience to help other learn
2. I don't believe in your #8. I think #1 - #11 gave the impression of #8. You worked your way out of the situation professionally and mentally. No small feat in my very humble opinion.

In a situation of uncertainty, a fragile portfolio that survives has a fortune component that depends on the intensity of the drawdown, the velocity of drawdown and the reaction time to cut positions. I also think that tail events have a systemic component, so my recovery is also partly due to system response

...
1. Write a book about the experience to help other learn
...

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