A Day Meant To Be Taken Off But The Lessons Remain
Posted by timothysykes on Fri 8th of Feb, 2008 06:01:46 PM
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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 20 | STXS | $3.21 | $3.48 | $813 |
| Nov 18 | PERY | $4.68 | $5.00 | $640 |
| Nov 11 | IIJI | $2.79 | $2.95 | $442 |
| Nov 6 | CVI | $4.42 | $4.70 | $530 |
| Nov 5 | MECA | $3.68 | $3.95 | $490 |
| Nov 4 | CVI | $5.18 | $4.94 | $472 |
| Nov 4 | CVI | $4.83 | $5.01 | $333 |
| Nov 3 | NAK | $3.30 | $3.37 | $157 |
| Oct 31 | IDAE | $2.18 | $2.18 | $20 |
| Oct 30 | HSNI | $7.37 | $7.86 | $561 |
| Oct 29 | EVC | $1.97 | $2.70 | $1439 |
| Oct 28 | HSNI | $6.92 | $7.30 | $540 |
| Oct 28 | HSNI | $6.20 | $6.00 | $320 |
Total: $35,854 (189%)
how’d everyone else do today?
Stayed on the side lines for today. Finished the week up 4.4%
sideline today away from the mkt was prolly good-waiting for TGAL to retrace a little below $4.80-i figure it sould considering slowdown in tech sector because less people will be spending on tech if doolars are few in the pockets -will see general slowdown in all sectors if we are heading towards bottom of market even though economic bottom is 3-6 months later that is if its a small recession if the FED capitulates all this is if ABCDE happens-no crystal ball in my hands-bears sure were right early 2007- i listened to the pumpers of the mortgage firms -dont know what to believe now-sidelines are safe but no money being made-????????????????
Tim, I know Thinkorswim is awesome but you should tell us how much you make per referral hahaha. I happened to see your site listed under “how did you find out about us?” when I was browsing around their site. Not to mention the $50 bonus/referral? You are inherently biased as your account is with them and there’s a profit motive but I really do think that Thinkorswim is a good broker. I’d swicth if they let me run my account with Canadian dollars!
That might explain why they are letting you short stocks under $3 among the other stuff you said they did for you ;)
Did you get any $50 referrals lately? I just moved my wife’s IRA to Thinkorswim two weeks ago - used the link from your site. I actually like their customer service so far, very quick to reply to all my e-mails. Am looking forward to using their free trading software - nice looking interface. Any particular feature you like?
Haven’t traded for almost 3 weeks myself - mother-in-law was in town visiting…
What do you think of doing a short-term short of AXP and COF after UBS downgrade? Maybe short for a few days? It’s probably not your usual daytrading style, but I think there’s some potential there.
IB blows Thinkorswim away. They’re not bad, but they’re not the greatest.
You’re celebrating the $40 rebate while several other brokers charge less for the same trades, same execution speed.
Are you getting paid by TorS?
Jimmy crack corn and I don’t care, Jimmy crack corn and I don’t care.
Haha, I can’t check up on my referrals, I just get quarterly notices. I highly doubt they’re doing any special favors for me, from what I’ve heard form everyone who uses them, they treat all their customers well. I’ve tried IB, they’re definitely cheaper, but customer service and tools aren’t as great.
AXP and COF are not shorts, too high risk of a double bottom, I ONLY short new intraday, daily, weekly lows
@Tim
I don’t think that TOS has better tools than IB. IB is not beatable in this area in my opinion. The other side of the coin is the outlook of the plattform which I don’t like too much on IB.
Anyway one can’t trade futures with TOS right?? So definitely not interesting.
hey tim i like the link of the 7 stocks to short, but are they really worth it? seems like the most you can get out of it is a 5% and maybe over a weeks time.. any ideas? whats your take on these 7?
just watching those 7, none of their patterns have interested me lately, avoid
In response to Mike - thinkorswim now accepts canadian traders as well: http://www.thinkorswimcanada.com/
Went short HSOA at .75 covered soon after at .60
Closed decent, actually hit .74 near eod, will watch Mon for weakness, especially if it gets a open popup
Short IDMI, ARTG, MPX
12% on the week, MPX had fucked me once on some bad timing but did me right as I got in at around $9. Possibly going to dump these three on weak volume.
i like MPX im thinking of shorting it for a few days. thanks.