Friday, November 8, 2013

Twitter Day + One

So I now look at the details of yesterday's mistake: when I accidentally bought 300 options at market when I thought I was buying 300 shares of SDS at market.  

My loss of over $500 was the commissions!  On 300 option contracts on the November 8, 2013 (today) 33 puts on SDS.  The options are now quoted at $.60. They were $.14 when I bought and sold.

My commissions on the 300 SDS would have been zero.

Thursday, November 7, 2013

Twitter Day -- But Unrelated

So I'm going along buying and selling.  Schwab's StreetSmart Edge is wonderfully set up for this...except THERE IS ONE BIG, BIG FLAW -- when you are on the tab, say, for SDS, or any stock, the tab may be on the OPTIONS page for that "stock."  (Actually SDS is not a stock but an index), NOT THE STOCK PAGE.  So you have the top of the page giving the stock price but the bottom part your curser is on some random option. 

After a successful morning trading, (up $178), having the urge to buy 300 SDS a half hour ago, I see that I was immediately down $750.  WHAAA??? Then I realized I had bought 300 SDS options that expire TOMORROW, AT MARKET --i.e. I got screwed.  I NEVER DO A MARKET ORDER ON OPTIONS.

Now, what does that mean?  SDS is a bet the general market will go down and SDS gives you twice the movement of the S&P 500.  It is the only way to do a negative bet in a stock account, other than buying puts.

A call option on SDS is that on steroids. The direction was correct, but NOT THAT FUCKING LEVERAGED OR LARGE A BET!

Shaking, I call Schwab and have to wait out the recorded crap.  I'm too nervous to get out of the trade myself.  Meanwhile each penny is a lot (for me) up or down. Let's see $.01 x 300 x 100.  Let's see, 300 x 100 is 30,000.  Times .01 = $300.  (Now that I've done it just now it doesn't seem so bad.)

Finally the rep answers and he does the trade.  But there has been little activity in this call strike.  Only 15 go off.  OH GOD, ONLY 285 TO GO. I tell him I can take over and wait it out on my own.  FINALLY there is an uptick and I "only" lose about $500.  SHEEEAT.