We've all been there, where we're watching a trade thinking "man I'm totally upside down on this one", when out of the blue it turns around and you pay for the mortguage! That's a lucky trade! Today I've invited Rick Thachuk from WorldLinkFutures.com to open himself up and tell us about the luckiest trade he's ever had.
He wants this to be an open discussion so please tell us about your luckiest trade so we can see just how lucky you were!
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It is often said that it is better to be lucky than be good. Despite years of formal education in Financial Market Economics and business, and despite countless hours of studying charts, news and trade videos, my best trade was one in which I literally had no idea what I was doing. Here's my story....
I was working in New York City as an Economist of a major commodities exchange. I remember that it was a Monday and I had just placed a trade by phone - you couldn't trade over your computer at the time, this was many years back - though I can't recall in which commodity market.
Two days later, I received a written trade confirmation from my futures broker sent by standard mail to my home address. Again, this was well before email was around so any activity in your account, such as trade activity, was confirmed by post. This was no big deal - I had confirmed the trade by phone on Monday - so I didn't bother to open the written confirmation until Friday night. That was a mistake...
I opened the trade confirmation expecting to see the usual entries for the commodity trade that I had made on Monday and the corresponding adjustments to cash. And, in fact, I did see this. However, I also saw, to my horror, something else. Underneath my trade was the calm confirmation that I had also, that day, bought an April Live Cattle futures contract.
Now, I had never even looked at the Live Cattle market, though I had seen live cattle before, and I certainly never traded it. That inescapable sinking feeling that accompanies all bad news was quickly returning but it didn't reach its climax until I read the fine print down at the bottom of the piece of paper that I was holding in my slightly shaking hands...
This is what the fine print said...
"Please check confirmations shown above and report any discrepancies. Failure to report within 48 hours shall imply your acceptance of the transactions above."
I was reading this on Friday night, well after the trade desk had closed and, since this would have to wait until Monday, well after the designated 48-hour period as well. It looked like this long position in Live Cattle was now mine.
I remember going to the gym that night and not being able to concentrate at all. All night I worried over this until I finally had an idea. Hmmmm, I wondered, at what price did Live Cattle close on Friday?
Saturday morning, I bought a financial paper to check prices - this was before prices were available on the Internet, indeed, even before the Internet was popular - and I was overjoyed to see that April Live Cattle had closed about 2 cents higher than the price at which I had allegedly bought. So, I resolved to do the following...
When Live Cattle opened Monday morning I would call the trading desk and immediately sell one contract, thereby closing at a profit this trade and simultaneously turning a lemon, as they say, into lemonade.
Monday morning came and I executed this operation without problem. Now the only thing to do was to wait for the trade report in my mailbox a few days later just as final confirmation of the success of my cleverly contrived plan.
And Tuesday, when I returned home from work, there was the envelope sitting in my mailbox. Hmmm... a little bit earlier than expected, but what the heck. With confidence, I opened it and read,
"This is to inform you that the purchase of one Live Cattle futures contract [last Monday] was attributed to your account in error. This transaction has been corrected and the Live Cattle purchase has been removed from your account."
Hmmmm..... unexpected is this... and unfortunate, to quote a wise, extragalactic teacher.
All at once, the implications of this innocent piece of paper hit me. The mistake last week that had started this whole episode had been corrected but the Live Cattle contract that I sold just a few days ago was without a doubt, absolutely incontestably, my trade and I would have to bear the consequences of that trade.
What had the price of Live Cattle done since I sold one contract on Monday? I hadn't even looked. It would have to wait until I got into the office the next morning.
I spent the night worrying yet again and this time having no one to blame but myself. And all because of an attempt to twist an accounting error to my advantage.
It was a long subway commute to work that morning and, along with the usual burden of the briefcase, I was weighed down by equal measures of guilt and trepidation. I entered the office, booted up the price reporting screen and... was once again overjoyed at what I saw.
Live Cattle prices had fallen starting almost exactly from my sale on Monday and were trading well below my selling price. When the market opened, I bought one contract to close this short position, and then watched as Live Cattle prices rallied strongly the entire day.
The result is that I had inadvertently, and without studying any charts or reading any news stories, sold Live Cattle at the high on Monday and then bought it back on the low on Wednesday. I made a 3-cent profit equal to $1,200 for the one contract. And that was my luckiest trade ever.
Despite all of my best efforts over the years since that Live Cattle trade, I have never been able to buy at the low and sell at the high again. Strangely enough, though, it has been easier to do the opposite (buy at the high or sell at the low), but that's a different story.
Do you have a story of your luckiest trade? If so, please feel free to add it. I look forward to reading it… Maybe, with your permission, I’ll bundle them into a book. You never know!
Rick Thachuk
President
World Link Futures, Inc.
A couple weeks ago I doubled two orders for penny stocks accidentally in an early morning stupor... just as they took off! I bought Jinshan Gold (JIN.TO) at .73 and that day it started a 3-day run to 1.02 (Sold half for a 43% gain in 3 days - not bad!) Sirit (SI.TO) has gone from .14 to .20 on news they implemented Mexico's first RFID vehicle identification - LOADS of potential on this one. I am hoping Sirit makes up for selling Diamet Minerals 20 years ago at 50 cents, shortly before they found diamonds and split multiple times on their way to $200/share before being purchased by BHP... 🙁
I bought stock in a company SHL Systemhouse on day one,
day two in the am it was announced that SHL
Systemhouse was being bought out by MCI Communications.
I pocketed 10 k in less than 24 hours.Nice!!!
i played in a poker game ,which had two stock promoters in it.one of them took a liking to me and told me to buy a stock he was promoting. i did and promptly lost $2500. he then gave me a second stock to buy. two weks later, i sold the stock for a $70,000 profit.i asked the second stock promoter,what he did for a living. he said " I SELL DREAMS. be careful out there.
My story: It was November last year and the market was tanking. My wife liked to watch "The Girls Next Door", the Playboy reality show. So I thought I'd look into PLA. I was a very novice investor then ! I also listen to radio talk shows on the Cumulus network. So I looked into CMLS as well. I ended up buying them both just before Thanksgiving. I had no idea of what Penny stocks could do ! I sold CMLS after it had a run up from 33c to 2.00-ish. PLA I held longer, waitied through thick and thin, then came the news they were shopping it around. Uht-oh ! So I held out as long as I could expecting a good run up in anticiaption of the sell. It didn't quite happen, but I was able to sell it at a decent profit. They had gone from 1.10 to 3.00 when I sold. I considered myself very lucky because of my noviceness and the manner in which I selected them. I do a lot more research now and have liquidated most of my common stock into ETFs and Mutual funds with high % track records. Oh, I also picked up AERG recently, after renting the movie "Iron Man". I got it at 42c on a fluke spike (gag) becuase the puchasing software was lagging slightly. But it has been worth holding onto.
My luckiest trade occurred during the "linux" era of 1999. Being software developers, my buddy and I were able to buy a small number of shares (125 each) of the VA Linux (LNUX) IPO before they were brought onto the market. We paid $30 per share. We anxiously waited during the day the shares were to come onto the market. I had an appointment to get my hair cut so I left to see the barber. I told my friend to call me if it opened while I was away from the computer. As I was driving, my cell phone rang. It was my friend... he said I was $30K richer! I knew he was pulling my leg, but he wasn't. LNUX had opened on the market at $300/share!! I didn't sell right away as IPOs had a tendency to move higher, but LNUX pulled back and I sold out in the high 200s a few days later. Wow! See http://en.wikipedia.org/wiki/VA_Software
Thanks for the great stories so far. I enjoyed reading all of them. It seems there are not too many futures traders out there! My thought about creating a book of such stories was not so much to teach anything - though there may be something to discover in these stories - but to present to the beginner a personable introduction to the world of investing and to the rest of us, some comic relief. While it would stand in contrast to the usual marketing/sales material that typically greets the beginning investor or trader, it just might stoke in some the interest and enthusiasm to give it a try.
Thanks again and 'Cheers' to those who were short T-bonds today.
I was in a hurry to get to lunch one day, but wanted to place a trade because at the time, i hated holding cash ($7000). just before i left i called my 'broker' and order 500 shares of BCE (nortel's parent at the time). that day they were trading at around $140.
so of course, over lunch i was telling my buddy that i expected BCE to spin nortel off soon. you guessed it - over lunch the announcement came out.
back to my 500 share at $140 order. most of you are smarter than me, because that was at $70,000 order, not a $7000 order. anyway, the stock jumped $10 while i ate my burger, netting me $5000 in my $20000 margin (luckily) account. I sold 400 shares that afternoon.
I'm still mulling what would be my luckiest (vs maybe simply the best) trade, perhaps I'll post one soon. I do recall doubling my money one day awhile back on SKF on what turned out to be pure hunch and bad information, though. Go back on a few month plot on that one and you'll see it.
I would be interested in seeing a book about luck. There's a saying -- do it once, it's luck, do it all the time, it's skill. There could well be things to learn that aren't obvious to the lucky person themself.
For example, why were the people in the posts above in the position they were in at the time -- so "luck" could strike? While I'm sure some of it was pure randomness, perhaps not all was.
I like to make my own luck personally. But I surely accept any free that comes along too. I believe that a person can be positioned to maximize the luck potential, or at least that's what I think I do, and most people call me lucky.
Your correct on your making your own luck,
causing it inadvertently is another scenario entirely.
I realize it now (usually pastense) but life is a learning experience especially when you break rules.
As usual, my luckiest were when I just started. I had owned a few drips as well as dollar cost averaging into SPY and QQQQ. I don't know anymore how it happened, but I started reading IBD and picked up one of O'Neil's books. I noticed that one of my geek friends said that mac's were getting pretty cool as they were running UNIX underneath. I then noticed them replacing a supercomputer at work with mac servers. Finally, my friend had a little storage device made by them, and it played music. I looked at the IBD ratings, saw high scores, and put in some money at $15, like the book said. That was Sept 2003 and just after that, the price started to move. I was so naive, that I didn't realize that daily 1-3% moves were out of the ordinary, but every few weeks, I'd put in more money, including the money from my ETFs. At the end of 2006, I thought, hmm... maybe I should sell. I picked up O'Neils second book and there was a chapter on runaway price peaks. A few days later, one appeared like in the book, so I sold at $75. I thought, geez, this sure is easy, of course, then the "learning period" kicked in. At least I took the AAPL profits and bought a laptop and a sub to IBD first.
My luckiest trade was actually two trades. It was during the dot com era in which I had purchased the stock of two companies. These companies do not exist anymore. At that time in my trading career, I was trading very wildly and using margin without stops. I was on an exciting roller coster. After I purchased the two stops, they started to drop little by little. I was fully margined with my account at $5,000 and I was close to fully margined with about $10,000 of the two stocks I had purchased. As I had mentioned the stocks began to drift lower and I just knew that they were going to bounce back up as all dot com stocks always did that (At least that's what I believed). As the stocks were sinking, I began to freeze and thought that I would soon be getting a margin call. I decided to wait for that call to sell the stock. This was about April of that year. As I felt sick whenever I saw the value of the stocks and my account, I quit tracking my stocks, my account and the market as a whole. The margin call never came, but still my imagination had envisioned the worst. Around November of that same year, I became brave and decided to take a quick peak into my latest account statement. I was stunned to see that my account had grown from the $5,000 to $40,000 in those 6 months and both stocks had taken off. The next day I sold both stocks and considered myself exhuberantly lucky. As it turned out, my timing couldn't have been much better as I sold just a couple of percent off the all-time highs for both stocks.
I am not sure I would be interested in buying a book about luck but that might be just me. All the best to you anyway.
another waaaaay back story,,,, i had call options on a company which was bought by transmeta,,,, they announced the deal on thursday of opex with me holding too many calls too far out of the money,,,, i cashed in at the open with a 4900+ % profit,,,,,,,
on a daytrade with dell options i bought atm calls on fri morning for 3/8ths and sold at the close for 3 7/8,,,,,
Great story. I would love to see this as a recurring feature.
Maaannny years ago, circa 1970, I was trading options and bought IBM calls at 2.50 and TXN calls at 2.50. A few days later, I put in limit sell orders at $5.00 each, thinking I had doubled my money in a week. Well, the TXN didn't trade...after I placed the sell order it backed off to 4 7/8 and didn't touch 5 again that day. As with your confirmation, it took a few days to find out what had happened. By this time the options were up and TXN was on a roll so I let them ride. Finally cashed out at $25. Nice little oops, trade. Hey, better lucky than good...
When I was trying to learn about options I subscribed to a service (expensive) that gave weekly picks. They and I thought energy stocks were going up. They did move a little. I thought the guys running the service knew what was going to happen. I bought some call options, then some more, way more than I should have had with my meager cash. Then hurricane Katrina hit, then Rita. Oil went up. The stocks went up. The options went up like a kite.
Then European sources started selling the USA tankers of crude and gasoline (but no diesel, if I recall diesel was a buck higher than gasoline at the pumps for quite a while). Japan sent gasoline too.
The price of oil and gasoline started down. I contacted the service and they said to hold on. 2x. By the time I sold, half of the profit was gone. I discontinued the service. I believe they follow a mechanical system and do not look at the real world at all, maybe just timing. I was lucky (can you count on hurricanes boosting all of your trades?). And I learned something about not believing everything even overpriced services tell you. I did not have trade triangles to help. I was thinking 25-30% (mental) trailing stop for those volatile options but I got talked into holding on longer. I was lucky the trade went my direction at all.
I had a position on back in 04 in a plastic manufacturer (3-400 shares). It had been very volatile, and was down enough that I just filled in the amount and hit send. In my haste I neglected to unclick the buy icon.
That was the day I found out about margin! It went thru and I freaked. Brought my total postion average down markedly at which point it reversed. End of day I was up $1800, and I left for Vegas that afternoon.