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A cautionary tale about confidence and control.
What happens when you hit a home-run but refuse to run around the bases?
What happens when you hit a home-run but refuse to run around the bases?
In late 2017, I was trading at a proprietary trading firm I had been at for 12 years.
The lead partner at the firm wanted to tell me about a stock and an idea that was the best feeling and most conviction he had ever had in a market call.
The lead partner at the firm wanted to tell me about a stock and an idea that was the best feeling and most conviction he had ever had in a market call.
This is and was odd. The deal is the group can trade whatever and however they want as long as they follow the risk parameters.
But still I was intrigued.
He was a smart guy and a bit of a manic researcher, so I thought he may have actually stumbled onto something.
But still I was intrigued.
He was a smart guy and a bit of a manic researcher, so I thought he may have actually stumbled onto something.
He proceeded to pitch me $OSTK
Not only was the retail portion undervalued, but all their investments in Tzero and medici and other ventures were seeds with enormous potential to explode into monster standalone enterprises that could revolutionize different fields.
Not only was the retail portion undervalued, but all their investments in Tzero and medici and other ventures were seeds with enormous potential to explode into monster standalone enterprises that could revolutionize different fields.
$OSTK Just peeked into the 20s and was starting to gain steam.
So I bit. I bought some 30 Calls with enough time to let it run.
It was a killer trade.
I rode them up to 45 and sold.
So I bit. I bought some 30 Calls with enough time to let it run.
It was a killer trade.
I rode them up to 45 and sold.
I went to thank him for the idea and trade.
He says to me "You sold?"
I said, of course I sold. It was a monster winner and I'm very happy to take profits here.
He said, but its going to over $100, atleast
He says to me "You sold?"
I said, of course I sold. It was a monster winner and I'm very happy to take profits here.
He said, but its going to over $100, atleast
I couldn't understand not taking something off at this price, with so much already in the green.
But $OSTK kept going. It was looking like he had the correct read and I folded too soon.
So I bought some 60 calls a little later.
But $OSTK kept going. It was looking like he had the correct read and I folded too soon.
So I bought some 60 calls a little later.
I rode these $OSTK 60 Calls up to 75 in the stock for another really nice gain.
So I go back and say thanks again.
Again he chides me for selling.
But I leave it at that this time.
Maybe I just don't have the balls or I just don't get it, and that's ok.
So I go back and say thanks again.
Again he chides me for selling.
But I leave it at that this time.
Maybe I just don't have the balls or I just don't get it, and that's ok.
Come to early 2018. $OSTK Tops out in the 80's I think.
Early in March with $OSTK dipping to the 60's, I take a week off to go to my brother's wedding.
The Monday I get back, it's trading in the 40's.
....and suddenly my account is frozen.
Not enough funds to trade.
Early in March with $OSTK dipping to the 60's, I take a week off to go to my brother's wedding.
The Monday I get back, it's trading in the 40's.
....and suddenly my account is frozen.
Not enough funds to trade.
The partner in the firm, round tripped the entire trade.
He KNEW it was going to $100+
He KNEW it was ground breaking news and business potential.
He never sold his long winners, he bought more on the way down and blew up everything in the process.
He KNEW it was going to $100+
He KNEW it was ground breaking news and business potential.
He never sold his long winners, he bought more on the way down and blew up everything in the process.
The firm is finished.
He had a complete meltdown and had to move home.
He was a friend, our wives and kids were friends and to this day we haven't spoken since.
He had a complete meltdown and had to move home.
He was a friend, our wives and kids were friends and to this day we haven't spoken since.
Luckily it was March so the traders in the group were able to salvage what we could of the year.
But we all took a hit and learned some hard lessons.
I'm happier & doing better on my own. More control & accountability suits me, but wish I could have ended up here organically
But we all took a hit and learned some hard lessons.
I'm happier & doing better on my own. More control & accountability suits me, but wish I could have ended up here organically
The craziest thing about the $OSTK idea is, HE WAS RIGHT
Everything he said about the stock, its valuation and investments at least appears to be coming true.
After bottoming out in the single digits mid 2020, it spike into the $120s (i think).
Everything he said about the stock, its valuation and investments at least appears to be coming true.
After bottoming out in the single digits mid 2020, it spike into the $120s (i think).
But that's the thing about trading, its not just about having an idea and sticking to your guns. Or about 'being right'
Its about timing, risk, control and so much more.
And if you don't run the bases on a home-run, because you want a grand slam? You might strike out instead.
Its about timing, risk, control and so much more.
And if you don't run the bases on a home-run, because you want a grand slam? You might strike out instead.
Lessons learned:
There were signs I should have seen coming and didn't press or question when I should have.
If something doesn't feel or sound right, ask questions and get satisfactory answers.
Treat your business business-like, especially with friends.
There were signs I should have seen coming and didn't press or question when I should have.
If something doesn't feel or sound right, ask questions and get satisfactory answers.
Treat your business business-like, especially with friends.
