I suspect some of you saw the article over on ZH about the “trader” who had the misfortune of having his entire account short KBIO which ripped about 700% higher this morning. The guy blew out his entire account (and a lot more) and put up this page to ask for people to help him make his six-figure margin call (the margin call itself is three times bigger than the original account). As of this writing, he’s raised about 1.8% of what he owes Etrade.
Having read the text of his GoFundMe page (which is typically used for more worthy causes, such as helping out families or individuals with medical emergencies or charitable organizations that need assistance), I wanted to review the entirety of his missive, since I think there are some important lessons in here. I’ve cleaned up some of the more egregious misspellings and syntactical errors, since it bothers me to sully my blog with such things. Here we go:
Hello to all you traders out there. I’m starting this page out of the recommendation of other traders in the community.
I was a grumpy old man even as a child, so this post emanates from that legacy.
I’ve been puzzling over the peculiar reaction the market had on Monday to the savage attacks that took place in Paris. Never would I have dared imagine that assets across the board would excitedly zoom upward following this brutal mass killing in one of the most beloved cities in the world. It just made no sense.
Dying To See Star Wars
One of the trending hashtags on Twitter in recent weeks was #ForceForDaniel, a campaign to get an early screening of the new Star Wars movie for a dying fan, Daniel Fleetwood. Director J.J. Abrams had the film screened for the man at his home, as The Verge noted below.
It wasn’t the first time, incidentally, that Abrams accommodated a dying fan: In 2009, he gave the late Randy Pausch (of Last Lecture fame) a cameo in his Star Trek reboot.
A Boost For Disney (more…)
In a recent post (“If Only They Had Shares”), Tim shared this bearish chart on SolarCity (SCTY), and his lamentation about having been unable to borrow shares to short it recently.
Bullish on DUST
In a recent post (“ETF Walkabout”) Tim mentioned he was bullish on the 3x inverse gold miners ETF DUST, due to its chart indicating a quadruple bottom:
A Hedge for DUST Bulls
I was thinking of making this post a video, but I recognize that the problem with videos is that you actually have to watch the damned thing. Text and pictures are more accessible. So, here we are.
October has, in the five trading days we’ve experienced so far, been a big disappointment for me. I guess I should have assumed it would be, coming on the heels of a fantastic Q3 (both for my portfolio and for Slope in general). Everything goes in cycles. I’m just too much of a brat to be able to tolerate this kind of thing.
A Brazilian Reasons To Be Bearish
In a recent post (“A Brazilian with a Sudden Rip of the Wax”), Tim noted that Brazil ETF EWZ was in free fall. For those who haven’t been keeping up on the bad news from Brazil, the headline of this AP article from Tuesday will give you a sense of what’s been happening: “Brazil’s economy plunging; no relief in sight amid political, financial chaos”.
A Hedged Bet Against Brazil
Every trading day, Portfolio Armor ranks all of the hedgeable stocks, ETFs, and other exchange-traded products in the U.S. by its estimate of their potential return over the next six months, based on an analysis of price history and option market sentiment. Then it subtracts hedging costs, and ranks them all by potential return net of hedging costs, or net potential return. On Tuesday, the highest-ranked ETF, and the 6th-ranked security overall, was BZQ, the 2x levered bet against Brazil. Portfolio Armor calculated a potential return of 15.2% for it over the next six months.