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futures trading horror stories


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futures trading horror stories

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  #1 (permalink)
Maineville ohio
 
 
Posts: 1 since Dec 2017
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what i want this thread to be about is not necessarily the volume of the money that was lost, but rather how important the money was that was lost

for example if someone had 50k to their name and they lost 45k, i would consider that to be a horror story, meanwhile if someone lost 200k but had 4m that's just par for the course.

personally one of my relatives said that someone from her church was fired from being the president of a certain corporation because he was trading futures with company retirement funds and was losing

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  #2 (permalink)
London Canada
 
 
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Well, I know mine isn't a big horror story....started with $4000....built it to $15,000 in a few months...and then lost $13,000 due to being lazy and relying on a broker who was needing to get commission and just needed to make trades. My own fault...but has stopped me from trading again for quite a few years. Slowly starting back into it now.

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  #3 (permalink)
Legendary Market Wizard
Houston, TX
 
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Interesting question, surprised it didn't get many responses, but then you did post it in a weird location. @Big Mike any chance you can move this to say "Traders Hideout?"

I don't have any catastrophic trading stories of my own but I did participate on the winning side of several catastrophic trades. My first ever proprietary trade was when I convinced my then Boss to allow me to buy spread option puts on the prompt month crude oil spread. It was the early 1990's and Metallgesellschaft AG was implementing a hedging program that eventually lost over a billion dollars which was a lot of money back in 90's. I was also very active in the NatGas market in 2005 & 2006 when Amaranth grew explosively before blowing up and losing $6 Billion. While I can't claim to be a big winner on any one trade, I was market making back then, and Amaranth/Hunter were a bull in a china shop so it was quite easy for the nimble market maker to consistently make decent money off of them.

Personally my worst trade ever was probably being short Netflix (At least I think it was Netflix) call options in my personal account back in early 2000s. I was down on the position and rolled them out, up, and larger to cover my losses. I then went on vacation and came back to a loss of almost $20k. That's the closest I ever came to blowing an account up.

Another nightmare trade of mine also involved selling calls, but this time it was more of a terrible tax/cash flow problem rather than a trading loss. In the internet stock boom I sold a lot of calls against stocks that I owned (long stock + short call = short put) and when the market crashed I ended up with large gains on the short calls, and another not quite as large loss on the stock. So I was PnL positive. The problem was that I was stupid enough to have the call profit gains fall in one tax year and the stock losses in the following year. So I ended up with a tax bill on the calls, but had to take the stock loss over several years due to the capital loss cap.

Since being out on my own, my only nightmare trade was loading up an algo with the wrong instruments. The second it was switched on it immediately executed a trade that was about $70k out of the money. I called the exchange to get the trade classified as an error (even with the no-break limits it would have cost me about $20k including reversing the trade) and amazingly the counterparty agreed to clean cancel the trade given that it was obviously an error. Whoever you are, Thank You.

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  #4 (permalink)
Westmount Canada
 
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Well, around 10 years ago, I entered a bunch of trades just before durable goods was coming out. But somehow i hit the middle scroll button on my mouse and changed all my orders from limit to market. I ended up buying 15,000 Eurodollar spreads at market. I had to keep them through the number because liquidity completely dried up. Fortunately i managed to get out flat (except for the fees).

The next day the CME sent an email to all market participants warning them about this "feature" on TT

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Legendary Bought TSLA at 880
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I agree, this is an interesting question.

I know a couple of guys who needed the Federal Reserve to bail their firm out. Fortunately, I don't have any horror stories by that standard.

One of my worst was because someone (on a workstation) had the wonderful idea to code up F2 to the front-end kill switch with no other safeguards and it passed code tests and escaped our attention. Then came one day, one of our operators took over the night session and, justifiably, it was a little darker so he pressed the screen brightness key on his Macbook.

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  #6 (permalink)
Pittsburgh
 
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ScalperBAX View Post
Well, around 10 years ago, I entered a bunch of trades just before durable goods was coming out. But somehow i hit the middle scroll button on my mouse and changed all my orders from limit to market. I ended up buying 15,000 Eurodollar spreads at market. I had to keep them through the number because liquidity completely dried up. Fortunately i managed to get out flat (except for the fees).

The next day the CME sent an email to all market participants warning them about this "feature" on TT


Whoa hold on dude....I was trading that market at that time....remember any other details...what spread etc....honestly I think I very vaguely remember it happening! Sorry about your luck.

If you were active in the spreads back then...any chance you remember the RELENTLESS selling in the red month's spreads every single NFP for awhile? I believe that began in '09.

Or was that you too?

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  #7 (permalink)
Westmount Canada
 
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09 was pretty much the end of the ED market for me. Too many algos keeping the curve in line which very much limited trading opportunities.

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