I started daytrading in 2005, so i really have no idea about the 'golden era' of daytrading, but recently several posts by a number of people claming massive numbers has really piqued my interest. If you traded then and have good stories I would love to hear them.... what did everyone trade? what was volume/range/spreads like? What type of positions? Consistant wins every day or huge homerun hits? Any decent stoies please post em.
You mean like when 3/4ths of my account disappeared in 1 hour during the week of 4/14/2000 thanks to the great NAZ swan dive. No thanks. I'm trying to forget that.
Heard of Schonfeld trader making more than Michael Jordan (20 mil plus) in 2000, heard of Assent (then Andover trader) making over $1 million/day, heard of ETG traders making over 250k/day. this was truly a "golden age of prop trading" Today, I hear of a Genesis trader making over 100k/mo.
I don't have anything to post about making big dollars, but I did daytrade OEX options back then and they were a lot more liquid and had much tighter spreads. I quit daytrading after my broker clamped down on the PDT rule, so I never really looked at OEX options again. But recently I brought up a montage of OEX options just for kicks, just to see how they looked. I was shocked at the low volume and the wide spreads. I guess the ETF's did them in.
Oh yeah, back before decimalization it was harder to scalp stocks. I could only move in 1/16ths so after the spread narrowed on a stock, I would give up trying to put in the best bid or offer in order to catch the next trade. Now you can do it ad nauseum until you bring it down to a penny.
I didn't daytrade during 1999-00, but I knew people who did and they eventually lost everything they made and then some in 2000-01. Buy-and-hold investors didn't fare much better especially if they invested in techs. It was a bloodbath you would not forget if you saw it first hand.
I began trading in August 1999. I read 'how to get started in electronic day trading' and was hooked. Was not a good time to start a career as a trader. Ideally you would have started in say 1996 and would have developed some skills/discipline by 99 to keep your profits. I began trading for $1 or 2 dollar moves using Level II, by the time i figured out the money was to be made buy and holding for 100 pt moves it was Dec 1999 and i manged to triple my account by March 2000 only to see all my profts vanish over the next few months.. Got out at breakeven only to get back in again on the first dead cat bounce. Eventually ended down $5K. Then took an 18 month break from trading. There was a guy at work who traded IPOs, made a fair bit then got greedy and lost all his profits plus another 100K in one day. He was a wreck. Head in hands didnt know what to do. Eventully the market forced him to puke his position as it always does.
I remember etrade started doing IPO's and everyone would have like 10 accounts with them since they had a limit of 100 shs per account, pretty much free money on those of course if you fast enough since they had a limited allotment of shares
I have a relative who was spending his last year before retirement(1999) staring at stocks instead of working. He was buying way out of the money calls on stocks that would move $5/day(like everything) back then. He and his wife had decided to build one house in Hamptons and one in S. Florida, he was still totally invested...his wife said, "If you don't sell those fucking options and have the money in the bank we're not buying those houses!" He didn't listen and bet it all on Lucent options :eek: ...just kidding, he actually did listen, threw his last $100k in options down a garbage chute as a last hurrah and is now happy and retired. I've seen my account balloon 1500% in a few months and come back down to much lesser gains...locking in profits is really hard...I think everyone should have two pictures, one of a Buick Regal and one of a Lexus LS next to each other so you remember to take at least some off the table when your gains are running.
Although there were lots of stories speaking of disaster, not everyone left that era completely broke. Those individuals who were savy were able to make it out with their winnings in hand. Today I see more people embracing technical analysis and fundamentals then ever before and this is what truly makes the market a challenging environment today. There are very few stocks where people simply ignore the charts or valuations. When a stock does get itself in a mania (such as JSDA or solar stocks), then the financial press is quick to point out how overvalued it is and what a lousy investment it will make. The days of 2000 are gone forever. A person who made a small investment in stocks in the early 90s made a killing. I dont see such huge growth moves happening anymore.