[MadMarketScientist]

Any of us who have traded a long time have probably on occasion let your emotions get in the way or our lack of self-control enter into our trading day and done something really, really dumb. However, looking back on it, it might be really entertaining or just fun to laugh about now that some time has past.

What would your story/stories be?

I have so many I wouldn't know where to start. From the simplest such as my inventions of new profane words to some of the worst revenge trades ever.

One instance I remember was a few years back I got on a medication for something I was dealing with. I didn't realize it when it was prescribed but one of the side effects is some people lose their self-control. Some people have gambled crazily on the drug, or done things they in the right mind never would have done. It only effects a few percent of people this way so kinda rare.

Well as you can now imagine I was one of those exceptions. I took the drug, and of course it didn't work at all for my symptoms. However, I woke up at something like 3am, and in a bit of a stupor went to my computer and started to trade the Dax futures. Mind you, at this time I never traded the Dax. But that night I traded the Dax. And traded the Dax. And traded the Dax. In fact, I couldn't stop. I knew what I was doing, I even called a trading partner of mine and told him I can't stop trading. He was like, dude, just step away, turn off the computer and mellow out. On that phone call I said "you're right, but I have to take this next trade" - which I did. I continued to trade right through the close and lost about $10K that day. I literally lost all ability to turn off the desire to take trades. Looking back it's pretty funny but scary that a slight change in your brain chemistry can derail all logical thought.

Anyway, might be a great drug if you're looking to build up the nerve for something but probably not so great if you trade!

Another favorite of mine, isn't something I did but meeting a guy who worked in private security, who had nothing but time usually decided to be a trader. Yet he had a bit of a temper let's say. When things went particularly bad one day he took out his Taser Gun and used it on his monitor. I can safely say I have never tasered or shot my computer. Not that the thought hasn't crossed my mind.

How about you - there's got to be some funny stories?

[TheDude]

Not me but someone I used to work with when I started trading - he was a BIG options local. His daily equity swings were 100k-500k easy. Over time he became a mess through too many late nights etc - issues with his wife that affected his trading. Instead of taking some time out, he got more aggressive.

One day he comes in after a bad drawdown of about 1mil. It wasnt his fault, but those idiots who do the settles he said. Anyway, he decided the only way to get out of the hole was not to hedge anymore (with the futures - we were usually delta neutral).

Never saw him again after that day....

[SIUYA]

only crazy thing I have done is decide I am bearish at a certain level and wishing to exit a long to then go and buy more at that level. Nothing too costly.
The two best stories I know of that are true.
1) guy declares himself bullish and starts to buy some calls, also sells some puts as well, after a while its going his way, he buys stock as well. After a while he is getting seriously excited and decides to hedge his position a little....yells into his two way (old days of the floor) to buy some of the index futures. (rather than sell as a hedge)
His massive long position looked good for a few days, and then spectacularly blew up.
2) One guy misread Royal bank of Scotland as opposed to Bank of Scotland (I think they were the two names) and proceeded to buy as many of the calls he could as he was bullish and they 'seemed' cheap. After lifting the market a couple of vol points that day, the next day he came in scratching his head.... wrong stock code v wrong stock. This is the crazy part..... he bought more thinking in for a penny in for a pound trying to squeeze the market..... It did not end too badly but it was still a loss.

[enochbenjamin]

well I've got 2 from my first 3 months of trading...

My first ever "trade". I had bought stocks and mutual funds before but never with the intention to trade them, more of a buy and hold philosophy. Well a trader introduced me to trading and I was hooked! Opened up a futures account and the first day I was allowed to trade, I bought 1 CL (crude oil) and in less than a minute I was up $3600. I couldn't beleive how easy trading was (oh boy did i have a lot to learn) and quickly cashed in on my good luck. I just knew I was going to be rich in a matter of weeks. Here is what I did not know:

1. that Nigerian rebels had taken over a Shell refinery and I was lucky enough to place my trade seconds before the news came out - I had NO IDEA news even affected trading.

2. I did not know what a stop-loss was. I could have just as easily lost $3600 in a few seconds.

3. I did not know how to open a chart on my platform. I had just figured out how to pace trades and was so anxious to do so that i just jumped in naked - no chart, no news, no ideas about anything.

Needless to say I blew that account out in the next 2 weeks.

Fast forward 3 months and I am educated now. Had coffee with a hedge fund manager who schooled me on "trend-trading" and I'm in the know. I even opened a "BIG-BOY" account with interactive brokers, cuz that's where the real traders trade (or so i thought). I am in Hilton Head with the family, who are all at the pool/beach while I am in the room studying my charts. Since I am a big boy I trade 6 lots at a time. Yup, just 3 months into the game and I am trading 6 of everything I touch - Wheat, Corn, Soybeans, S&P Futures, Gold, Silver, Dow Futures, you name it. Anyway - today wheat was the flavor of the day. My wife comes in the room glances at my chart and proclaims - "even I can tell thats going up! why aren't you buying it???" That was the trading signal I had been waiting for. Buy 6 lots of wheat!!! about 5 minutes later wheat was limit up! I was thrilled and decided to go to the pool and buy my wife a few cocktails! Ok, what I didn't know:

1) I knew about limit moves, but I didn't know that the market remained open for trading in the opposite direction. I was sure that once the limit move occurred everybody just waited to trade the next day. When I left to party I was up about $12,000 - when I got back the market had declined a wee bit and I had less than $3,000. My wife rationalized that 3k would cover the cost of the trip so I cashed out...only to see the market really close limit up on what was the start of the wheat run a couple of years back. I recall doing the math and had I been able to hold those 6 contracts for the next 2 months I would have netted close to 300k.

I've learned a lot since those days but I still feel like a newbie!

[i trade]

Well it wasn't so much what I did but more so a matter of what my broker allowed me to do! Here I am...newby S&P trader, maybe trading a few months. Had to be in around 1996 or 97 before the time of the e-minis...only the big SPOOS....and it was $500 a point vs. the $50 a point in the present day ES. Back then there were no electronic orders...all orders had to be called in to my broker who in turn would call them into the floor. Then I would have to wait for the call back with my fill so I could place my stop. Lucky me...my broker, a sole proprietor IB working out of her home in Florida, takes a liking to me and gives me the number directly to the floor of the S&P's so I can call my own orders in and handle it all my self. Great...saved me some time and it was cool at the time to call directly into the floor. One problem...my account was only $3 or 4k and here I am calling directly into the floor with my orders. I could have called in with an order to buy 10, 20, or even 30 cars at the market and they would have placed the order, who knows? With a 10 lot order my $4000 account could have been wiped out with less then a point move against me. Pretty crazy when I think of the damage I could of done financially to both myself and my broker. (Needless to say that account didn't last very long!)

[UrmaBlume]

One Sunday morning in December of 1984 as I was eating my breakfast and reading Barrons, I came accross an article about the Bhopal disaster.

The price of Union Carbide stock had tanked and it was in all the financial news.

Instead of entertaining the thought of shorting Union Carbide, I rather cold heartedly began to consider what was the capital loss and how much would it cost to pay the liability from killing over 2,500 Indians. I put the cost per person at between 250 - 500k. The market had penalized Union Carbide far more than that, many times more than that in fact.

On Monday I loaded all of my clients and myself up with calls on Union Carbide stock. I mean really loaded up. Within a week the stock started to run, we rolled up through 3 strike prices and I made over 100k on commissions alone, not counting my own position.

Kind of cold, but it was smart, it worked and I made some great dough. That trade was probably the only trade I have ever made in my life that was based on fundamentals and not technicals.

UB

[NoDoji]

In early December 2008 I was trading POT, trying to time bounces as it was pretty much in free fall each day. My account was with Etrade and I paid $16 round trip on every trade, so scaling in and out of trades was cost prohibitive commission-wise. As a result I always traded 1000 shares of stocks, all in, all out, and did so regularly with POT as it continued its eternal fall from grace.

Frustrated with trying to time the stock's bounce, I decided to buy POT $55 calls late in the day on 12/4/08 after POT had fallen 5 days in a row to below $50, figuring that was a ridiculous price for a stock which had traded 6 months earlier as high as $240. Surely it had to bounce and options gave me a couple weeks to take advantage of that with a fixed risk in place.

The next day POT not only opened gapped down over a dollar, it continued to drop! I had a moment of irrational fear that it might go to $0, and I remembered that when you have that thought, it's almost always the time to buy.

I had an appointment to go to, but figured I'd add to my option position before I left. So I opened my order entry window, selected the same calls I'd bought 5 of the day before and instinctively entered 1000 in the Qty field (remember, I'd been trading 1000 shares of everything for months). Just as I was about to transmit the order I thought it would be wiser to wait until I returned from my appointment to add to the position.

At that moment I saw the 1000 in the Qty field and nearly had a seizure on the spot.

Had I transmitted the order it would've gone through immediately at market, and I've no idea how much slippage 1000 contracts of even a highly liquid option would've incurred, but even if the entire position filled at the offer it would've been $5000 for the spread, plus $760 commission one way.

If I'd transmitted the order, I really doubt I would've noticed the mistake because I was standing up at my desk in a hurry to leave for my appt and likely would've clicked and left, thinking I'd simply added 5 contracts, a very low risk move.

So I return from my appt and see that POT bottomed out around $47, finally bounced a bit, putting my losing call position slightly in the green. Then price stalled and began pulling back. Oh, no, I thought, not another leg down! As the call premium moved back toward my break even point, I closed out the position for a net gain of $30 and decided I just wasn't going to trade POT for a while.

Well, that day POT put in its 52-week low and over the next 2 weeks rallied to $83 a couple days before expiration. The premium on the calls I had went as high as $27, meaning 5 contract position that I paid $1000 for would've been worth over $13,000 had I held it.

Then there's the other "coulda": If I'd transmitted the 1000-contract order, and held it through the rally, it would've produced a gain of close to $3 million.

[shuklapradeep]

Originally Posted by UrmaBlume »

One Sunday morning in December of 1984 as I was eating my breakfast and reading Barrons, I came accross an article about the Bhopal disaster.

The price of Union Carbide stock had tanked and it was in all the financial news.

Instead of entertaining the thought of shorting Union Carbide, I rather cold heartedly began to consider what was the capital loss and how much would it cost to pay the liability from killing over 2,500 Indians. I put the cost per person at between 250 - 500k. The market had penalized Union Carbide far more than that, many times more than that in fact.

On Monday I loaded all of my clients and myself up with calls on Union Carbide stock. I mean really loaded up. Within a week the stock started to run, we rolled up through 3 strike prices and I made over 100k on commissions alone, not counting my own position.

Kind of cold, but it was smart, it worked and I made some great dough. That trade was probably the only trade I have ever made in my life that was based on fundamentals and not technicals.

UB

Hi,

Few things, I am happy to learn about the trade you did and made good bucks out of it. Just leaving few point to ponder what really happened that day in 1984.

about 20000 people were dead and more than half million people affected and disabled due to that gas leak.

It was promised that each of them would getting more than $500K, but till today after 26 years of that tragedy, they either did not get anything or just about Rs 15000($300). Hahahaha, what a mockery has Indian government made by doing all this. It has nothing to do with Union Carbide chief, he left without being detained and none other than my country politicians escorted him to the plane flying to America.

Just a note, I have nothing to do with Bhopal Tragedy, nor was any of my family members were there, so you know it is an honest opinion.

By the way, I am also a day trader, I trade Indian Markets and trade for a living. I have a turnover of more than $200K per day.

Have a nice day all of you