A Day Meant To Be Taken Off But The Lessons Remain
Posted by timothysykes on Fri 8th of Feb, 2008 06:01:46 PM
Tags:
TIM $15,001, Up $68, Stupid Trade Pays For Sushi Dinner
Another slow day—no big smallcap movers—but just some more reasons to love Thinkorswim. This time around, it wasn’t excellent customer service or their letting me slip by the ridiculous Pattern Day Trading Rule, it was them letting me short a stock under $3. I thought that was a hard rule, but apparently the customer is always right with these guys—I love it! IB, Ameritrade, E*Trade and Scottrade users, you poor poor people, you deserve better, you deserve Thinkorswim.
The stock was Arte Medical (ARTE), a company that makes a supposedly safer Botox-like product, that quickly surged 30%+ on news that Botox is more dangerous than previously thought. (hmmmm, injecting toxins and bacteria into your face because you’re a superficial slut is dangerous—who knew?!?!)
So, this little $30 million Botox competitor had a right to surge and when I saw it at $2.60, I shoulda woulda coulda bought it and sold out 5 minutes later at $3, but me being the cynical ass that I am, all I wanted to do was short—expecting a retrace back to $2.60ish. I bided my time, hoping it would go over the magical $3—giving me a solid 40 cents of downside potential—then asked my Thinkorswim chat guy for shares. Got the shares, but the stock dove too fast as the familiar wall of sellers—who usually appear only on the third or fourth day of a run-up—entered, probly because the volume fell off a cliff. As I mentioned, Thinkorswim let me short anyway—even as I questioned them, telling me “we can do that”—and I shorted 1,000 shares at $2.84ish.
But with my downside target only 25 cents lower, this was going to be tight. As each minute passed and a wall of buyers at $2.75 met the wall of sellers, I got nervous and said to myself—this is not a trade I should be in. Too much risk, too tiny a company to short. Too much fundamentally positive news to short into. So, talked myself out of my short position, covering at $2.80, making enough to cover my sushi dinner tonight, but no sake.
Pathetic trade, either gotta buy it immediately at $2.60, selling into the greater fools/panicking shorts around $3, short if you’re lucky enough to sell into that fool who placed a 20k+ market order (gotta see it to believe it on level 2, what schmuck!) that made the bid jump from $2.80 to $3.15 within seconds, wait to short until the afternoon fade or hold off completely.
As it turned out, I didn’t have to panic—the price gradually did retrace back to $2.60, woulda been a little extra money, a little better sake, but no more. That’s the good news about shorting into a surging stock when the buying volume is fading fast and there’s many bitter shareholders who are in at higher prices—even when you screw up, it’s not that bad. The risk is the volume continues to explode and you get caught in a nasty squeeze of $1+ within minutes that totally destroys your stupid scalp. Risky, risky, not even closed to being ideal, def. not a trade I’m proud of, maybe done out of boredom, but good management/recognition to get out quickly.
And to top off my Thinkorswim love affair, today was that time of the month for them…the time where they give me $40 for placed at least 40 trades last month. Gracias mi amor.
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TIM Trades
View All| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| Nov 19 | AENY | $2.80 | $3.02 | $1148 |
| Nov 18 | NLST | $4.16 | $4.40 | $947 |
| Nov 18 | IMGG | $1.42 | $1.64 | $2094 |
| Nov 17 | NLST | $5.04 | $5.59 | $2195 |
| Nov 13 | VRMLQ | $21.50 | $22.97 | $2901 |
| Nov 11 | EONC | $2.61 | $2.80 | $687 |
| Nov 10 | EONC | $2.74 | $3.36 | $9784 |
| Nov 6 | QXM | $4.31 | $4.80 | $1936 |
| Nov 4 | COT | $8.66 | $8.88 | $642 |
| Nov 4 | QXM | $4.61 | $4.89 | $822 |
| Oct 30 | DDRX | $25.70 | $26.53 | $812 |
| Oct 29 | CTDC | $4.00 | $4.42 | $781 |
| Oct 26 | AWSL | $3.24 | $4.10 | $2516 |
| Oct 23 | RODM | $5.27 | $5.23 | $301 |
| Oct 22 | AMLM | $2.69 | $2.97 | $820 |
| Oct 22 | USEG | $6.12 | $6.09 | $85 |
| Oct 20 | CBOU | $8.93 | $9.06 | $243 |
| Oct 16 | VRMLQ | $16.79 | $18.65 | $2773 |
| Oct 13 | YONG | $11.05 | $11.66 | $1202 |
| Oct 13 | NPHC | $0.59 | $0.71 | $583 |
| Oct 12 | IMGG | $0.60 | $0.70 | $682 |
| Oct 9 | ZAGG | $5.50 | $6.10 | $2380 |
| Oct 7 | GVBP | $0.03 | $0.27 | $702 |
| Oct 1 | NPHC | $0.70 | $0.85 | $1482 |
Total: $98,094 (681%)
