Losing pride, shame, and $7,270

Here it is, the post that many of you have been waiting for.  Sadly, this post will likely have a larger view and reading count than other popular posts on Retard Trader like Timothy Sykes psychic detective, Trade Authorization: No, and the lead into this post which is Losing thousands of dollars.  The reason for the potential higher reading count, I have failed.

Let me first say that I’m fully aware that failure always has a larger following than success.  You can see this is obvious by every person that stares at traffic accidents.  Nobody stares at the success of vehicles making it to their destination without incident.

Let me start from the beginning trade of the smallest pain brought about by OE (options expiration) and move through the more painful part.

Back on February 4th, I decided that C (Citigroup) was going to turn positive and announce something spectacular, so I purchased some barely OTM (outta-the-money) calls.  The stock was trading at $29.56 when I bought the 25 calls for $.72, which seemed like a good idea at the time.  At no point did my position turn to a positive gain though.  Maybe in the future I will let that be my gauge for judging when I should sell for a loss instead of riding things into worthlessness (that’s what she said).

Feb 4 the stock closed at $29.22 (36 cents less than when I bought the options).
Feb 5 the stock closed at $27.05 (down another $2.17 cents.. that’s F’ing insane).
Feb 6 the stock closed at $26.92 and would not see $27 again.
Feb 14 the stock closed at $25.74 and hasn’t seen $26.  It might not see that again for a while either.

There was a speculative news announcement on C that never made it to fruition.  I can’t say much about it because 1) I’m not suppose to know about it and 2) I do plan on trying to play it whenever it does happen.

C took away $1,850 from me.
25 contracts x $.72 = $1,800
25 contracts fees = $50 ($1.00 contract to buy & $1.00 contract to sell/settle)
Total C loss = $1,850

For JCP we are going to have to go all the way to Hong Kong.  Well, at least in our minds.  That’s where my JCP pain story starts.  It was during a time when I was sleeping less than 4 hours a night, as I would watch the U.S. stock markets during the night and help do work for the U.S. office where I am employed (full-time, despite my blogging interruptions).  During the day it was working alongside the Hong Kong or China operations, which was a 6 days-a-week job with a minimum of 12 hours work daily.

I was trying to make something happen to my account even if it was just something quick.  I figured that I would have a profit, it was during some market action, so a little profit was almost a lock with JCP puts (I thought).  Well, it actually was a lock, but unfortunately not all was sold for profit, and then I got stupid.

One week later I was still in Hong Kong and still holding onto the full 20 contract position I had taken in JCP puts.  The stock had only moved downward $.78 but the volitility had given me a profit, of which I tried to act upon and actually did get a little gain, on half of my position.  I put in a sell for 20 contracts and only 10 sold, meaning that I made a $580 profit on half of my position but would not wind up seeing a profitable time in this trade after that.

From that sell date of January 22nd, the stock would continue to climb upwards.  And as time went away, so did the contract value.  Yes Squid, I know, I know… “Your position makes money if benefits if volatility decreases“, though you might appear to have nearly perfect hindsight your grammar isn’t dead-on so you might want to think a lot before “doing book reviews or something“.

By Feb OE the JCP puts were worth just a little more than a Thai hooker with A.I.D.S. and morals.  Not much at all.  Making a profit on half of a position and losing full value on another half doesn’t seem to weigh itself out equally.

JCP took away $5,420 from me.
10 contracts x $5.40 = $5,400
10 contracts fees = $20 ($1.00 contract to buy & $1.00 contract to sell/settle)
Total JCP loss $5,420

Since everything is written on this site regarding my trading for what has gone from being a race to being a contest against myself, this will be no exception.  The combined options loss was $7,270, or probably about 90% of my account’s value (or more, I just don’t have the mind to handle the math right now). Can I battle back from this?  Yes.. What other choice do I have? 

Because I put everything out here, you can tell that I don’t have much shame.  While losing this much of my account’s value should also show, I have little pride to ride right now.  I’m almost starting the race again, only this time being down a bunch of money.

Now I have less money in my account’s value (no cash, and a Reg T Call for $1,500).  I think that I learned what happened to Lindsey when I received this email from my broker:
Our records indicate that you have generated a Reg T Call, a type of Margin Call created when exceeded your 2:1 overnight buying power.

HOW TO MEET THE CALL*:
You may satisfy this call by

Liquidating stocks - liquidation of marginable securities worth 2 times the call amount if the account is not in a Regular Maintenance Call.
  OR
Depositing cash or marginable securities

FAILURE TO MEET THE CALL:
If your Reg T Call is not satisfied by the due date, the position that generated the call will be liquidated by the firm. You are responsible for any of the commission fees associated with the liquidation of your securities.

Furthermore, your account will be restricted and you will be required to meet all future Reg T Calls in T+1 (trade date plus one business day) for the next 90 days. If another Reg T Call is generated and is not satisfied during this 90-day period, your account will be frozen and limited to closing transactions only for 90 days.

Wow.. and damn.  What kind of crap is this, kicking me when I’m down.  I thought about pulling a Lindsey and just waiting for them to make the first move, but figured that they might do something to my blogging ability (isn’t that what happened to Lindsey?).  After they called me to indicate they were serious about this, I made a quick liquidation of a holding in another account and satisfied my Reg T Call.  Now I’ll have to pull out $1,500 after I made profit in my Retard Trader account so that I can keep things fair for the site’s informational purposes.

Alright now, let the comments come in.  Tell me what I did wrong and right, what you would have done differently.  I like the constructive criticism and narrative whit, but you can write crap too.  Also note that except for some language filtering all comments that are not just spam are approved.  Good, bad, and your’s.