You know you're in trouble in a trade when...

You know you're in trouble with a trade when you start listening to Lenny Kravitz's 'Are you gonna go my way' in an attempt to will it in your favor.

Add your personal favorites/experiences. and not you 50 share trading ameritrade kids at home.

 

....easy.....when you suddenly feel everything looks and feels so fucking bad and depressing, and you feel you can't take it anymore.....

that's when you really know you messed up and need to take the loss

oh, good times, good times...

 
Best Response

Short,

My advice is be very careful with options. They can really burn you if you are on the wrong side of the trade.

It's been almost 2 years since this happend, so I'm a little rusty. I'm trying to remember whether it was the October or November S&P calls we traded, but I believe it was the October calls. This was before the market crashed back in 2008, I had to execute an options trade for the October S&P 1150 Calls for a portfolio, the total size was 1500 contracts (while it may not seem like alot, it's a large trade and is capital intensive, especially if it goes the wrong way). This was just before Lehman went bankrupt, as we were rolling contracts from September to October. We sold them at $10/Contract. When news of Lehman's possible bankruptcy was happening, me and a coworker suggested that we at close the position and revisit this in a few weeks, as Lehman had me spooked with the talks of their liquidity and ability to meet obligations. My boss says nah, it's a load of crap and has no problem keeping the position open. So, the news of Lehman hits, and the market tanks and he's just smiling and being content, as the market didn't start to really nose dive to worry levels. He continues to ride it out and then the S&P drops to 1,000. He starts considering his options, no pun intended, and the market continues to drop, this time breaking 900. So, he calls us into his office, and he's got beads of sweat dripping down his face, turns to us and and says I want an out, close out the options position. We're 7 days to the expiration, and the options are so far in the money, that they are trading at $220+/Contract to buy them back. Yeah, that was way to expensive to close out the trade. We made good money in the portfolio through August, but this trade brought us into the red. It was a fucking nightmare.

Despite it not being my own trade (or call for the matter), I still consider this to be my worst trade, since I was the guy executing the orders to buy the options.

Moral of the Story: Don't fucking play around when it comes to Index Options. They hurt.... alot!

 
Frieds:
Short,

My advice is be very careful with options. They can really burn you if you are on the wrong side of the trade.

It's been almost 2 years since this happend, so I'm a little rusty. I'm trying to remember whether it was the October or November S&P calls we traded, but I believe it was the October calls. This was before the market crashed back in 2008, I had to execute an options trade for the October S&P 1150 Calls for a portfolio, the total size was 1500 contracts (while it may not seem like alot, it's a large trade and is capital intensive, especially if it goes the wrong way). This was just before Lehman went bankrupt, as we were rolling contracts from September to October. We sold them at $10/Contract. When news of Lehman's possible bankruptcy was happening, me and a coworker suggested that we at close the position and revisit this in a few weeks, as Lehman had me spooked with the talks of their liquidity and ability to meet obligations. My boss says nah, it's a load of crap and has no problem keeping the position open. So, the news of Lehman hits, and the market tanks and he's just smiling and being content, as the market didn't start to really nose dive to worry levels. He continues to ride it out and then the S&P drops to 1,000. He starts considering his options, no pun intended, and the market continues to drop, this time breaking 900. So, he calls us into his office, and he's got beads of sweat dripping down his face, turns to us and and says I want an out, close out the options position. We're 7 days to the expiration, and the options are so far in the money, that they are trading at $220+/Contract to buy them back. Yeah, that was way to expensive to close out the trade. We made good money in the portfolio through August, but this trade brought us into the red. It was a fucking nightmare.

Despite it not being my own trade (or call for the matter), I still consider this to be my worst trade, since I was the guy executing the orders to buy the options.

Moral of the Story: Don't fucking play around when it comes to Index Options. They hurt.... alot!

Haha...this story is horrible and everybody involved in this trade should have been fired. Selling options should be done with extreme caution.

 

Not me but a guy I worked with...

You know when you're in trouble in a trade when you throw your phone in the wall and start yelling "Fucking HOGS" loud enough that the secretary in another person's office asks if she should call the police

Pork Futures...not good times for that guy a while back

If I had asked people what they wanted, they would have said faster horses - Henry Ford
 

wait you were writing and selling the call options? or you meant buying them? yeah i think that was oct cuz i remember telling a friend the 11 level in the SPY or DJ was to be watched with the earnings that month.. and this was end of aug 08 and was referring to earnings season, little did i know what was happening with fannie and freddie and then lehman etc.. DUHNUHNHUHNUH

 

Short,

Thanks for pointing that bit out. Yeah, we were writing (selling) the call options. If we were buying them, then do you think I'd be calling this the worst trade ever.

It was just a shitty call and my boss didn't want to recognize. Lehman had most of us spooked, especially because we had a few open trades that they were counterparty to about a week before they went bankrupt that we closed out on because of the bankruptcy rumors oddly enough. We actually ended up making a small profit closing out our swap positions... not enough to offset the options trade we did with our desk, but you get the point.

 
Frieds:
Short,

Thanks for pointing that bit out. Yeah, we were writing (selling) the call options. If we were buying them, then do you think I'd be calling this the worst trade ever.

It was just a shitty call and my boss didn't want to recognize. Lehman had most of us spooked, especially because we had a few open trades that they were counterparty to about a week before they went bankrupt that we closed out on because of the bankruptcy rumors oddly enough. We actually ended up making a small profit closing out our swap positions... not enough to offset the options trade we did with our desk, but you get the point.

Do you mean you sold put options? If you sold OTM calls on S&Ps with pretty much no time to expiry, and the market was tanking, losing money shouldn't have been an issue

 

if you sell calls for $10, and have to buy them back over $20 you are just being stubborn. I am not against naked calls on indices because its not like a biotech name. $10 to $220? what a joke that literally was like trying to pick up pennies but being ran over by a bus.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 

haha if you write calls you betting equity goes down, if you write puts you betting equitiy goes up

if you buy puts you are betting equity goes down if you buy calls you are betting equity goes up

 
happypantsmcgee:
You know blastoise needs a girlfriend when you read this thread...just kidding dude

Men who want a girlfriend are coming from a place of weakness, not power. When a man desperately wants a partner it makes him act and behave in a needy and desperate way. Women pick this up even before you approach them. They can see it in your posture, your eyes, the way you move your arms, and other aspects of your body language. Then when you talk they can hear it in your voice and where you place your hands. You shouldn't "want" a girlfriend or "need" a girlfriend. You should choose to have one when you meet a woman that fits your criteria, won't play silly games with you, and compliments your life, not impedes it.

 
blastoise:
happypantsmcgee:
You know blastoise needs a girlfriend when you read this thread...just kidding dude

Men who want a girlfriend are coming from a place of weakness, not power. When a man desperately wants a partner it makes him act and behave in a needy and desperate way. Women pick this up even before you approach them. They can see it in your posture, your eyes, the way you move your arms, and other aspects of your body language. Then when you talk they can hear it in your voice and where you place your hands. You shouldn't "want" a girlfriend or "need" a girlfriend. You should choose to have one when you meet a woman that fits your criteria, won't play silly games with you, and compliments your life, not impedes it.

Says the powerful man posting to an internet forum on a Friday night with a children's cartoon character as a profile picture.

I kid because I care :P

 
Bondarb:
and to answer the original question: You know you are in trouble on the trade when the prices start moving against you, simple as that. Before you enter a trade, you should know what you are going to do if it goes against you and not rely on signs other then the PnL as they are not reliable.

simply the best risk management tool of them all. SB if i had any wso credits left.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 

Exercitationem non vel pariatur inventore. Et veniam non aut voluptatibus corporis. Explicabo ad porro doloribus vitae ullam aut omnis officia.

Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
 

Quis unde magni at commodi aspernatur. Dolor ipsam est facere quia qui rerum. Quia accusantium et fugiat distinctio similique amet. Enim occaecati fugiat dolorem laborum doloremque et.

Neque consequuntur sint optio commodi voluptas. Quis error mollitia quia quasi ut mollitia sequi. Nulla qui corrupti voluptatum quo nihil et.

Voluptates sint eum mollitia eaque nesciunt. Dolorum aperiam beatae dicta.

Sunt odit fugiat similique explicabo. Eos non laudantium veritatis velit. Nemo itaque esse consectetur. Et aut id eum sit minima. Voluptatibus odit eaque dolores quia non quae. Aut recusandae molestias nostrum blanditiis deleniti.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Betsy Massar's picture
Betsy Massar
99.0
3
Secyh62's picture
Secyh62
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
DrApeman's picture
DrApeman
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
GameTheory's picture
GameTheory
98.9
9
kanon's picture
kanon
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”