Do bear with me as it doesn’t make perfect sense, but the trading lesson remains which is why I share:
I’m watching a golf tournament which is being led by Greg Norman and somehow I’m able to short 3,000 shares of Greg Norman at $1.28. (For some reason, his ticker is FBEA…the price goes up or down based on how likely it is Norman will win the tournament like McCain’s election chart over at Intrade).
So, Norman, as great as he is, starts choking and his stock drops to $1.20/share….now I don’t want to cover FBEA too soon because I don’t want to be trading against my TIMalert subscribers so I hold off from taking my easy profits with the goal of covering in an hour or two—when no self respecting TIMalert subscriber would still be shorting.
Sure enough the price keeps dropping and I want to cover at $1.04 for a solid $700 and I put in my “buy to cover” order with a limit of $1.10 (just in case since FBEA is also a OTCBB stock so the executions take longer than expected).
Five minutes goes by and I still don’t have my execution…and friggin Norman sinks a birdie on the next hole and the stock jumps to my limit at $1.10.
I check my order screen and realize what the problem is–it’s not a slow execution, it’s that I put in my buy order (my broker Thinkorswim doesn’t differentiate between “buy to cover” and “buy” orders) for ticker FBAE, which happens to be Phil Mickelson, so I got executed on Mick at 92 cents/share!
So now I’m short Norman, long Mick, which is the exact opposite of what I want to be considering Mick has all but given up and is enjoying a friggin candy bar on national TV.
…and then I wake up.
Trading Lesson:
Fat finger trading mistakes do happen, accept them and get out of these trades ASAP
Tags: Analogies, Bad Trades
