What is the worst trade you've ever placed?

Worst in terms of loss, bad premise, or stupid mistake… whichever you choose.

My worst wasn’t a huge loss, but I was drinking and decided I could trade oil futures in the evening with no liquidity. 1 contract, 0.15 against me I double down, then do the same 0.10 later. After 10 minutes I sober up and close my trades down ~$700. That was an expensive bottle of wine.

I bought a significant amount of Lehman during the crisis. I was a 24 year old with little idea what I was doing. Just that knee jerk, “it’s low it must be a good buy” that amateurs go for.

I’ve found investing is a lot about discipline. Discipline to stick to your guns when markets blow out and give you negative feedback and discpiline to not drink the coolaid and buy as things go up and you receive positive reinforcement. But it really boils down to adhering to a fundamentally based view. Simply buying something when it’s low blindly is the antithesis of this and I see it all the time.

I kept buying SUNE throughout a decline last fall. Because you know if an undervalued stock drops 20% it’s even more undervalued.

Before I was even in college. Bought Global Crossing based on the hype - Fiber optic cable all over the world! - and didn’t understand (and still don’t) their business model in the least. Pretty much bought at the top and it went to zero in a couple weeks.

Taught me what Peter Lynch always talks about (to paraphrase) - buy what you know, or at least can understand. I don’t have the accounting chops to avoid potential frauds like that, but I shouldn’t have bought it anyway because I never understood their business.

For my own account, I shorted Samsung Electronics in October 14 based on stupid fucking reasons around Huwei et al taking their market share in phone handsets etc. Basically I didn’t know the company and I just took a view based on the information that I happened to know. I had no reason to place that trade and I should have known better, it’s not a pure play and there are big cultural background to Samsung in South Korea that gives them a lot of leeway that other companies don’t get.

It’s fecking hard to keep your nerve on a long position that’s going against you but it’s even harder to keep your never on a short that’s seriously going against you.

Incidentally, I bought a lot of RBS in the crisis. The fact that they didn’t collapse was sheer luck.

I love this thread… Klinko, yours is my favorite so far! Drunk trading… don’t do it! wink

I of course messed up big with options last year. I made all the mistakes… pennys in front of a freight train… naked and short… horrible exit strategy. I wrote two naked puts on Starbucks last summer right before the “flash crash”. I figured, hey, it’s Starbucks. What could go wrong. Friday before the 24th stuff started going bad and I was down $200 on a trade where my max profti was something like $45. I went out to walk the dog and got back and then I was down $500! I closed the trade and took a useless $500 bath. If I had sold spreads and rolled, I would have been fine… but I was not there yet in my understanding. I was soured on options for a long time. … but iron condors have seduced me back into the game :slight_smile:

after making huge money in a few months with borrowed money in a small mining stock in late 2010, i bought a position in another small mining stock after a chapter 7 reorg. i didn’t really understand the typical downward pressure that a reorg creates and i got hammered pretty bad. no liquidity so no good opportunities to exit. lost ~$6k in a couple of weeks. a good lesson to learn as i can now make plenty on the short side in similar trades going forward. it was hard to not be a part of the eurphoria that existed in canada in late 2010, early 2011, especially when you made several hundred percent on the way up. still came out of it with no student debt and a house downpayment.

My entire oil portfolio. I have a few tickers with big positions down 75%. Though I’ve averaged down to a breakeven overall that should be realised around $40 oil. Not bad considering I was buying at $80.

Lost about 1,500 on AMD in college day trading it. Got caught on a fail breakout that imploded intra-day, kept buying thinking “it’ll bounce at any moment”

I’m pretty sure I was buying at the long-term top of $42 in 2006. Never forget that mistake

To be fair, years later and MLA still can’t figure out mining101. Super good at riding the beta train and playing pretend though.

http://www.analystforum.com/forums/investments/91344716

My very first trade, I accidentally confused my stop size with my position size, so my size was about 10x too small. I sold when it was up 15% or so, but since my position was miniscule, there was essentially no gain. At least I didn’t confuse the other way around.

I also sold more or less at the bottom in 2009. That sucked, but it was also in response to changes in my liquidity needs. But that’s probably why it was a bottom, when your liquidity limits correspond with everyone else’s, that’s when the bottom comes in. Having done that, it was extremely difficult to get back in on the rise. If I had been more into technical analysis at the time, I probably would have pulled the trigger faster on the way down and re-entered faster on the way up.

I sold about half of my gold position fairly close to the top. I wish I’d sold the other half, though.

I realize this is more of an investment than a trade, but right out of school I loaded up on my employer’s stock (the 401k match went directly into company stock) in 2007-2008. My employer was a company basically at the center of the financial crisis and it’s not around today (in its previous form, at least). There were a couple sleepless nights after the stock was down 40% in one day, and I was worried about losing my job at the same time. That type of leverage through investment and employment to a single company is totally stupid. I luckily sold out a month or two before it went to basically nothing, but I lost good money and the stress was not worth it.

LAME, bchad! …but it does remind me of another epic fail of mine that was entry related. It was when I first was experimenting with extended hours trades. I saw that sometimes you could get fills at rediculously low prices if you just put in the limit order and see what happens. I meant to put in a trade down about .30 (it was only a $2 stock.) I was not used to the large bid ask spread in extended hours so when I brought up the trade box I was just looking at the cents parts. I did not realize it was a whole dollar above the market! I placed the trade and of course it got filled right away…and my account was also immediatly down about $300! My trade was so stupid that it was memorialized on the the 6month 4 hours chart for all to see :frowning:

With all these dumb trades it is amazing to report that my p/l after my first year of trading was still +8% :slight_smile:

I made a direct investment in several F&B outlets. I found out about the dirty games of procuring the barely edible ingredients and using cheap sauce and spices to cover the bad quality. I changed everything and opted for high quality products and fresh ingredients. Nothing stayed overnight. My cost increased by 25%. I increased price by 7%. Well, I lost a lot of money over several years. I closed the business.

Consumers demand sh#t (literally) for 7% reduction

Not really a trade, but kind of: as a broker at the stock exchange, I didn´t immediately close a small short on a tech company. I tried to cheapen my position in thin trade, price went up, I had to close at a 5-digit loss. Went home early…

I went long an energy company and a midstream fund right before the OPEC meeting that memorable thanksgiving y. I had spent time around people in the industry and was amazed at what was going on. But I didn’t think through the sustainability of the price given all that supply. Still own the midstream, got out of the energy company a few months before they declared bankruptcy. I haven’t figured out my view of midstream yet, but I certainly have a view of energy prices that I think keeps me on the sidelines for most

penny stocks angry crying

well doesn’t buffett say this as well - - - he said ‘people will always chew wrigleys gum’ and also how he didn’t really understand tech

He may have but it’s definitely a Lynch-ism. Peter Lynch went so far to say this: Given a piece of paper and a crayon, you should be able to illustrate how the company works. If you can’t do that, you don’t know enough about it to own the stock.

Another Lynch-ism that I firmly believe in is the ability to replicate s business across the country (or world). I forget the exact fast food place, I want to say it was Orange Julius but really don’t remember. Peter was at the mall with his daughter and she was raving out this place. He noticed the long lines and every seemed to love it too. Went back to work to discover it was just a small regional chain. Saw no reason it couldn’t go national and have the same success. Bought it early, made a killing. People may say that can’t happen as easily today, but CMG did it. Right up until they gave everyone explosive diarrhea.

and yet they’re good enough that a large part of their clientele is willing to risk explosive diarrhea for their goods. would you buy a ford or iPhone at the risk of explosive diarrhea?