The Day the Earth Stood Still: The End of My First “Career”

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I was once an equities trader…

Three and a half years ago, I was an equities trader. It was my first “job” out of college. I did it for a couple of years – I had some great months, had some crap months. It was fun. It was tough. It was… money.

And not just any money – but real money. Hundreds of thousands. Millions. Or at least dreams of it.

I hardly talk about it much these days. I haven’t looked at the market much at all since I left it. I heard the dow hit highs earlier this year. I’d short that.

Anyway…

The other day a young twenty-one year old dude at my hostel made some mention about how he wants to start a business, learn to trade stocks and forex, and some other things.

My response, “I’ve done all of that….”

I don’t know why I said it like that. It just came out.

I’m passed that phase in my life of chasing a quick buck. I did that for too long.

He kept asking me about it, and I told him the one story that popped in my head, the one that really stuck out. A day I lost about $8,000 because I was early and got shook out and then sat there as the guy next to me made $300,000 and the guy across from me made $1 million. In one day. Yes, they keep most of it.

It sticks out to me – because it was essentially the last day I traded. I mean, I stuck around for maybe a month or so after that – but mostly I didn’t come in the office much anymore. After that I was pretty much done. Pretty burnt out and ready to look around and pursue other career options.

After I told him that story, he asked me a few more things about trading and I figured – maybe I’d have something on my computer to show him to give him a feel for what I used to do. Not sure what I still had from those days, I went digging.

Interestingly enough the first thing I stumbled on was my trading journal from that exact day.

I figured it’d make for a good blogpost. It’s interesting to see something written so long ago from me. It’s interesting to read it and try to gauge how I felt at the time. It’s interesting to give up on your career when people around you just had “career days.”

It’s all in perspective. But, here it is. In full glory. Unedited from then. My thoughts on that day. The only thing changed is the names of people in it.

From the archives. May 6, 2010 (yes, those who recognize the significance of the day this was the “Flash Crash“)

I think it starts with this trade in EDD… but it gets better.

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EDD – Spiked down, so I bought 300 at 14.80.  When it bounced a bit, I covered 100 at 14.94.  I was trying to hold the rest, but it went back to my breakeven price and I got out of it.

LPL – Was selling off, so I picked up 100 shares at 19.09 to watch it and play the bounce.  Changed my mind about it and covered at 19.04.

BCS-  – BCS- was down a lot on the day, as all the BCS preferreds were.  I had just seen them sell off yesterday morning and bounce all the way back, but today’s move had lasted longer already and was selling off further.  I bought 100 at 19.25 in order to watch it and get in it bigger when it did start bouncing.   A few minutes later it looked like it could be bouncing, so I picked up another 200 at 19.38.  Then, it sold back off to new lows.  I still felt like it was going to bounce and I felt like the whole number 19 could provide some support, so I picked up another 200 at 19.16 and another 200 at 19.08.

DNP – Sold off sharply on no news, so I bought 500 at 8.80.  I covered 300 at 8.88 on a bounce a little while later.

RBS-F – This stock also sold off on a sharp leg down, so I bought 500 at 18.89.  It bounced a bit and I covered 200 at 18.99.

LINE – another stock that sold off on a sharp leg down.  I bought 300 at 23.43.

HTD – Another one that sold off sharply that I picked up 300 at 13.08.

BAC-I – this sold off on a sharp leg down as well and it went into slow quote, while the ECN’s were still trading above where the specialist was printing.  I threw some orders at it and got filled on 3,000 shares at 21.07, but as soon as I got filled the ECN’s were down there now too.  I made the decision to hold it along with the other preferred and funds I was accumulating, because I still expected a nice bounce to occur.   Then, it sold off some more against me, so I grabbed another 1,000 at 20.70 in order to get my average price down.    I was scared of this because of how much size I was in.  I knew I was in more than I wanted to be in earlier than I wanted to be, but I made the decision to hold it since I expected a nice bounce to happen.

PFF – The preferred ETF was selling off hard as a lot of the preferred and funds were taking these sharp legs down.  I figured something was going on with PFF or it’s holdings – somebody was dumping preferred shares?  PFF was rebalancing or something?  I figured something was going on with this and had a flashback to that day last October when PFF and it’s holdings went up strongly and then eventually came all the way back.  I got long 700 PFF at 35.39 in order to watch it and my plan was to get big once it looked to really be bouncing.

FTB-C – another holding of PFF that did the same leg down type of move.  I picked up 200 at 24.15.

BAC-J – another one.  I picked up 200 at BAC-J.

Now, I was holding all of these positions – 4,000 BAC-I, 700 PFF, 700 BCS-, 200 DNP, 300 RBS-F, 300 LINE, 300 HTD, 200 FTB-C and 200 BAC-J, and more preferred stocks and small thinly traded funds kept making the same move.  A quick sweep down.  Then, they would bounce a bit, but not really go anywhere.  It kept happening, but I was in so much BAC-I that I couldn’t pick up any other stocks, I already felt like I had a lot at risk and I was already down enough in my positions to be past my loss limit.  PFF took another leg down and I decided to hold it, since I was past my loss limit and wanted to be in it when it bounced.  The stocks kept selling off on me, but I was holding out for the bounce.  I was turned off at this point and couldn’t open up any new positions, so I got up to talk to my coach to see if I could get turned back on when things started to bounce so that I could load up, particularly in PFF since that’s what I thought this move was based on still.  I was trying to hold for the bounce, but my positions just kept going against me.  I got down over 1.5 points in PFF and then I really started hurting when BAC-I took another leg down and I was now down a point in that position.  I was really watching my P/L now and trying to draw a line in the sand.  I was down $7K now and so I started to lighten up.  PFF and the others took another leg down as the whole market really started to sell off and pick up steam.  I covered everything once I saw my P/L go down over $8K.  Once I was out, I was down about $8.5K on the day.   I was definitely disappointed with how that turned out.  Pretty much as soon as I covered the market really started nose diving – the Dow went from being down 200 pts. to 400 pts. to 600, 700… all in a matter of minutes.  The market was tanking fast.  The Pit yelled out that the circuit breaker would be triggered once the Dow was down 1050.  Brad and Kyle start yelling and telling people to buy before the circuit breaker got hit, I thought that was a good strategy, but at this point, I was cut off and way past my loss limit and too devastated and disappointed to even think about opening another position.  The Dow went down as much as 998.5 I guess, it moved so fast, I saw it down 980 and then it was only down 930, then only 850 – It was bouncing back hard – V-bottom type of move.  Kyle yelled out to buy anything that was down, and next thing I know, my coach went from being down 10k on the day to up 30k.  Sam who sits next to me bought some PG and some GE at really low prices and was already up a lot now that they were bouncing.  I really felt like I was missing out on the action, so I went and talked to James about getting turned back on and he gave me a little more room, but the Dow was only down 400 now and I had missed most of the move and most of the craziness, but I was able to place the following trades:

CSX – CSX and plenty of other stocks were showing umode, so I went through them and tried to hang out orders on both sides away from the market and to the specialist.  CSX was the only one that printed me.  I got short 14,000 CSX at 52.50, and started covering instantly at 52.27 and 52.29.  It took me awhile to realize how much size I was in and how many times I had to hit my button to cover it all and the ECN’s bounced on me some, so that my last fills were at 52.48.  My average cover was around 52.40, so I pretty much made 10 cents on 14,000 shares.

BID – I tried to get a good fill on BID as well, but was only able to get 100 shares from 34.40.  Covered at 34.29.

HHH – HHH spiked all the way to 156 and it was normally a $56 stock.  I shorted some  at 116 as soon as I saw it, but I knew those prices would break, so I tried to wait for it to go back lower in order to get more.  I shorted another 800 at 62’s and then another 1,200 or so at 56.50 and 56.38.  Everything above 60.08 wound up breaking, so I didn’t get to keep my 62’s.  This didn’t break until way after the market closed, so I held the 1,200 from an average of 56.42 overnight.

SLM – I got filled long in SLM with 4,100 shares at 11.22, but was down about 10 cents as soon as I got filled, so I just covered.  Looking at the chart, I wasn’t long from a great price by any means.

BRK.A – I got the closing print on BRK.A, short 1 share from 113,500.  I pennied the bid at 112,500 and covered my share at 112,501. So, I made 1,000 pts. on that 1 share.

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Three and a half years have passed. But reading this still spikes my adrenaline. Crazy. I remember a lot of it vividly – not the details and particular stocks, but the action on the trading floor and what was happening that day: where I was at certain times, who I was talking to, etc. – all of that is very vivid in my memory.

It’s hard to tell where I ended up on the day – because I made some of it back from the downward peak of being down $8,500 – including ending the day with a quick $1,000 trade on 1 share of Berkshire Hathaway.

But, basically what happened is this was a career-making day in a slow market. 2010 had been a shit slow year of watching paint dry. And this was the day. Some traders made their whole year’s income in this day. You just can’t miss days like this as a trader…. and I missed it. And, it wasn’t the first time – and I was sick of it.

That’s ultimately what ended that career. Missing out on too many “career days”.

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Life goes on…

 

4 thoughts on “The Day the Earth Stood Still: The End of My First “Career”

    1. I did an internship for broker in college – not actually equities trading.

      Also, I traded on my own for about a year in college – and wrote a blog about it.

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