Boy, what a year! 2024 was truly an incredible journey. I discovered futures—specifically, futures options. Not that I didn’t know about them before, but I was ignoring them. When I finally gave them a shot (or should I say they gave me a shot?), I was blown away. It was easy, fast, and extremely profitable. That is, until volatility hit the markets in August. Up to that point, it had been smooth sailing; after that, it became a Herculean struggle—and it still is.

We tripled our account in 2024! Our cash grew by 330%, and you can imagine the excitement. I felt like the king of the world, already picturing the golden gates of early retirement. And I traded like that too—which turned out to be a huge mistake. I was intoxicated by the minimal restrictions on trading futures and options: no Pattern Day Trader (PDT) rule, no day-trading limitations, and the allure of capital efficiency. Smaller capital to trade big? Count me in!

But therein lay the hidden danger—not in trading big itself, but in the devilish details of SPAN margining. SPAN is a fantastic tool if you manage to trade small and keep more than 50% of your account in cash reserves. Honestly, 60% is probably safer. The trouble is, SPAN is a black box. You don’t realize what’s happening until it happens—and suddenly, you’re hit with a margin call. One moment your buying power looks great at +$20k, and three minutes later, it’s deep in the red. You frantically close trades to free up capital, thinking you’ve fixed the problem, only to find your account is $20k underwater after the market closes. Digging out of that hole? Not fun.
 

 

Since August, I’ve been battling SPAN every day. It feels like the market—or SPAN itself—is playing games with me, laughing at my every move. The once-thrilling big gains turned into a defensive war to protect them. I haven’t opened a meaningful new trade in three months. Any trades I’ve opened were small and carefully designed to increase buying power rather than risking further losses.

SPAN feels like it was designed to drive traders mad, not to facilitate regular trading. But the lesson was crystal clear: money management is everything. If you want to dive into this world, I highly recommend Nauzer Balsara’s excellent book, “Money Management Strategies for Futures Traders”. There, you’ll learn just how little it takes to completely ruin yourself—and how to do the opposite to stay afloat.

This year was a steep learning curve for me, and I learned it the hard way. We didn’t get wiped out—yet—but I wish I’d spent more time understanding SPAN margining before opening trades like there was no tomorrow and counting on big bucks rolling into our bank account. Now, I’m praying for volatility to ease up so SPAN gives me a break – so I can trade big again! (And no, that last part was sarcasm.) I’m committed to staying small: using no more than 30–40% of my available buying power and opening new trades only after the old ones are successfully closed. If I need to adjust trades, I’ll wait patiently until they’re fully resolved.

 

This is my New Year’s resolution!

 

From now on, I’ll manage open trades to a successful close before applying strict money management strategies. These include closing trades at the profit target, using stop-loss orders on futures themselves, and avoiding overloading my portfolio with too many futures options—because I’m not waking up the SPAN beast again.