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Made small "fortune" twice trading options...lost it all both times. Time to
move on?
u/the-grinder471d, 16h
So let me give you some background. I have a great job in the medical field
that pays a little over six figures. My wife works as an attorney so
combined we do pretty well. We own our house and still have 25 years left on
the mortgage. I became interested in trading options a few years ago. My
first go at it I started with $2500 in January and by December I had $100,
000. I guess greed got to me and I saw dollar signs and made some moves that
were too risky and within a month...poof it was all gone. I felt like I
still had an edge and that I was good at finding undervalued contracts and
undervalued companies. I wanted to invest in myself and give it another go.
So I plunked down $15,000 around Feb 2014. By December I had close to $250,
000. I would say I made about 300 trades in that time span. The same thing
just happened again, somehow in the span of two months I lost it all again
on contracts that I didn't even think were too risky! I have learned a ton
throughout this whole process but losing that amount of money hurts, and it
hurts bad. Even though we are just the same financially it hurt my ego maybe
even the worst. I really felt like I was good at this, but the same
scenario, two years in a row? Maybe I just got really lucky. Do I keep at it
and try and rebuild knowing full well that I still need to make drastic
changes to prevent the same thing happening? Has anyone else gone through
something similar? Please ask me questions. Thanks.
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papabois
471d, 9h
I've had a similar experience. I have absolutely no formal training in
anything financial. A few years ago, wanting to invest some money I had, I
opened a trading account and bought about 25K worth of shares in a few big
companies (GOOG, AAPL, MSFT, MCD, DIS, and BIDU). Their value went up
incrementally over the next few months and I ended up with more than I
started with, but nothing to get excited about. I kick myself when I think
about what would have happened had I just left the money alone and let it
grow over the last few years. But, instead, I decided that I wanted it to
grow faster and thought I'd try day trading.
I liquidated my positions and used a strategy I can only describe as insane.
I completely ignored fundamentals, and focused only on the daily price of
the share and the chart. Each day I searched for companies whose stocks were
priced under $10 and were on a sharp upward trajectory. I would then buy a
large amount of shares, between 25K and 50K worth (double if I was using
margin). I held the position for literally seconds or minutes, and then sold
. The stocks may have only gone up ten to twenty cents in time I had them,
but that earned me $1K or $2K per trade.
I enjoyed 'working' for less than an hour a day and making a couple grand. I
had bad trades sometimes, but had successful trades more often than not.
After a while I got fancy and started shorting. Over the time I did this, I
made a lot, up to $30K in one day (I made this shorting SRPT).
I was doing okay until I started relying on more than the two factors above.
I started paying attention to news and fundamentals, and subscribed to a
few forums. I started over-thinking what I was doing and made a really
terrible, greed-fueled, emotion-based, retarded trade.
I bought $200K worth of shares in a patent troll company betting on them
getting a positive verdict and a large settlement or award. Things didn't
turn out quite how I had hoped, and the shares I bought plummeted. At one
point I had $125K in losses on paper. I refused to sell, to take the loss,
and decided to ride it out all the way, hoping to make back my money somehow.
I ended up being married to that goddamn company for a miserable year and a
half, and as a result going through a huge depression, having no hope or
peace of mind at all, having nightmares about the loss, shaking my marriage
and self-esteem.
In the end, the company had one day, less than 24 hours, when the price
rocketed based on rumors. I was aware of it as I followed the stock closely,
and I sold. I breathed the biggest sigh of relief, and felt like a criminal
getting a pardon from the governor. The price when I sold rocketed past
where I thought it would, and I ended up making about $40K on the day I sold
, which ironically was my biggest profit on a single trade. After all was
said and done, I actually made a lot of money trading and came out ahead, if
money is the only measure.
The stock has since dropped like a rock again; I check it once in a while
and I can feel some anxiety if I imagine I am still stuck. I have since
printed out a copy of that stock's chart, stuck it on my wall, and stare at
it anytime I think about trading. I have not made a single trade since. It's
been over a year and sometimes I think I would like to get back into the
game, but I am not ready for that roller-coaster ride yet, if at all.
