Ladies and germs, so many ways I have lost hard earned trading profits, here are a few: 1) I had been in real estate 20 years+, I figured I knew a great deal on what to look at of buildings and vacancy percentages, they were always 97-98% full of 150 unit apartment building. Lol, yeah wasn't laughing then. 911 happened and I wasn't aware solders could terminate the leases. Everything I had was low income HUD before buying this property, over half left. Was losing over $40k each month, took me 18 months to get full again and lost 500k. I designed some weird system in 1989 for trading Big S&P. Had done several trades making couple hundred each lot so feeling happy bout myself- broker calls to congratulate me. Next day thought hell, time to run with Big dogs and do 20 lots, first 2 small winners so went to 25 lots, the broker calls to tell me I am over what I can trade and BAMM, some report came out and down 3 points, I told broker to buy 25 ATM, so he does not realize am already long and market going down. He calls back with fill and says am down $125,000 WTF? Liquidate me!!! Go to bank for another loan. Path WAS gutted by slow to learn to program. Didn't trade again for 18 months till I could back test.
lost £19,000 on UK FTSE short puts in 2005-just pulled the plug on the trade- 3 days later the market had made a'V' bottom- I could have avoided the loss totally by not panicking. Had a broker trae futures for me- that was a disaster. There is a reason they are not traders despite their inside knowledge-trading is like nothing else
I remember Thornburg mortgage... not fondly. And some adjusted options contracts that looked too good to be true.
The day of the London tube bombings? I got called into he office early because we were short ftse skew. By the time I got in the market was up on the day.
An interesting read on the subject is a book called “Supertrader meets Kryptonite.” A bunch of fairly well known traders describe their worst ever loss.
My worst trade ever just happened to be a profit. I bought "Limited Stores" in 1972 shortly after they went public and held through the 73-74 bear market and had a 6 fold profit by 1978 and sold when they went into an acquisition phase so I thought the run was over. I am not sure what they are called now but they are more famous now for Victoria's Secrets than anything else I suppose. I forgot about them until I read an WSJ article in Jan, 1990 of the top performing NYSE stocks for the decade of the eighties and -- Yes, Limited Stores was the top performer. My opportunity loss today is in the tens of millions that I could have had. What turns it into one of the worst trades for probably anyone is that I wired to proceeds to a business venture that turned out to be a scam so I lost everything on that trade. I am in my 40th year anniversary of selling my stock of a lifetime so thanks a lot for bringing it to mind and making me tell you about it.
I looked up Limited brands. Stock was approx 26 cents in 1970s. Today something like 46. Annualized return was about 11percent and it would have been worth tens millions for you. A real world example of compounding. If you had bought and held the spx when you sold limited, you would still have made at least several million.
Biggest $: https://www.elitetrader.com/et/threads/respiratory-syncytial-virus.285876/ Was not the most painful, nor the one with best lessons.
One of my worst trades was my very last equity trade...maybe 15 years ago now. I bought Royal Ahold (a dutch grocery store) underlying at close to $30. The financials looked solid and the PE was probably 4 with a dividend. My thinking was that in the heat of all the tech/biotech stuff I'm buying a boring ass grocery store. THIS will let me sleep at night. After sleeping well for about five or six nights, I wake up to the stock trading below $10 and halted. WTF? The CFO had offed himself, within hours of the company admitting that they had "made up" around 500mm in revenue and the CEO was reported missing. Awesome. I finally bailed on it around $3 and change. A few months later another trader friend of mine was telling me about this stock he had that doubled and he thought it had legs. He had bought Royal Ahold under $4 and it was pushing $9 now. I wished him well.