Last update: August 2021

“The way I quit my job was… well, let’s just say I burned the bridge behind me.”

Slawek J —

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Traders,

In this blog, I’ll continue telling the story about how I was taking the first steps in the financial world. If you didn’t read the first four parts, please, visit the links below:

• The Story of my first trade (Part 1)
• The Story of my First Trade (Part 2): I am a Pro!
• The Story of my First Trade (Part 3)
• The Story of my First Trade (Part 4): Newborn Baby

So, I quit my job. But I didn’t go to my boss and gave him my two weeks’ notice as a normal person would do. The way I quit my job was… well, let’s just say I burned the bridge behind me.

— ‘Okay, finally free.’ I said to myself.

I was trading well for a few months. The market started to change its characteristics from going straight up after bottoming, to sideways. The first small losses started rolling in. Not a big deal at first, but after a few losses summed up to a couple of thousands of dollars, fear started to creep up on me.

What if I don’t have enough capital to survive my learning curve?
What will I do for a living if I lose everything?
Will I go and work as a mechanic again? NAAAAH!!
Or will I?

Those were the dilemmas I was dealing with at that time.

I still did not go through learning Options, Spreads, and Hedging from Kiyosaki’s school. So I booked the Options course and started reading the book before the online and live classes started.

I am pretty sure I don’t have to tell you how I felt after a few pages (if you have read the whole series). Delta, Gamma, Theta, open interest, intrinsic value, in-the-money options, credit and debit spreads. Those were just a few terms that added to the frustration. Options were a completely different animal, and I did not understand any of the material I went thru. I signed up for a Trading Labs for options thinking I would learn from there. So, one day, the teacher says:

– ‘Just go and place an order in your virtual account so you can understand better how the “straight long call” moves in case of a gain or a loss.’

I did that. I can’t really remember the outcome, but I learned how the order was placed.

So one day, I decided to trade USO to the downside using debit put options. I am talking about the time when you had to type in the options symbol, unlike nowadays, where you just click have to click the contracts you want to trade.

In my laptop, I was using two applications. One for the analysis from one firm and TD Ameritrade’s for trading money. Unlike now, I was hyper nervous when placing orders. I rushed to buy those puts as fast as I could because USO started moving my way.

I placed the order, got filled and started watching USO going down. I was super excited. Checking the risk graph, it started showing decent gains. I think oil moved down about 5% so I decided to take my money and run on that same day. Switched my window to my broker and…

–$3,000 loss.

Yes, a three thousand dollars loss was what my P/L window was showing me. I grabbed the phone shaking like a leaf in the wind and called my broker:

— ‘TD Ameritrade, please hold.’ (nice Chopin in the background)
— ‘Yes, how can I help?’
— ‘I got into USO puts. It moved down 5% and my computer is showing a huge loss, you need to fix that!’
— ‘Please hold.’ (nice Chopin in the background)
— ‘Sir.’
— ‘Yes.’
— ‘You got into long calls.’
— ‘What?’
— ‘Yes, long calls.’
— ‘Can you fix that or cancel my trade?’
— ‘Do what?!?’
— ‘Nothing.’

I hung up, devastated. Lost my first options trade because I typed in the wrong options symbol in the order window. Everything matched: strike price, expiration month. The problem was that I typed in the call side of the options chain.

I had no clue how to calculate risk-reward, position size, nothing. I knew nothing about trading options, except how to place an order the wrong way.

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