A Stupidly Done, 14-Minute Trade

I hadn’t planned to trade today, just move more money into T-Bills by buying in the secondary market. But the vigs and mins on the 13 and 26 weeks were abusive. So I decided to buy at Monday’s auction instead and switched over to marking myself to market and catching up on political news. Then an item at Yahoo Finance caught my eye.

Chile decided to nationalize their lithium industry, and SQM --a stock I’ve wanted to buy-- was taking a hit, a big hit. A guess said the hit was overdone, and a quick look at SQM’s fundamentals confirmed the company was healthy. So I scrambled to get TOS launched and running, which takes a couple of minutes due to their constantly installing updates.

So I launched Schwab’s platform instead, pulled a quote for SQM, saw that I was a bit late at catching a bottom, but not intolerably so, and then made the mistake of buying with a market order --because my experience at Scwhab with market orders has been good-- and got filled above the ask. I was p#ssed.

I should have used an aggressive limit order. Worse, the purchase depleted the cash in the account, and I was now trading on margin. Double p#ssed at my own stupidity. So I wrote an order to transfer funds, but they wouldn’t be instantly credited, as is the case with some brokers. (Triply p#ssed.)

“Well, Charlie”, I said to myself. “You got yourself into this mess. Now do the right thing, and get yourself out of it.” The fastest way to fix the problem would be to reverse the trade. A chart said SQM was still being bid. So I did the equivalent of hit the 'Flatten" button and sold at market.

Final dollar score? In at 62.47. Out at 63.65, for a 1.89% gain for a 14-minute holding-period. And SQM closed the day at 63.45. So, though using a market order disadvantaged me getting in, it advantaged me getting out. (Thank you, Market Goddess, for forgiving me my stupidity.)

Trading grade? An F minus for how I put the trade on, but maybe a grade of B minus for the quick and successful repair.

Lesson? Plan your trades, and trade your plan.


I’m glad you made a quick profit despite the trade not being executed as carefully as you usually do things! I got into FDX on a similar hunch back in August when it fell 40% in one day. I read everything I could find and came to the conclusion that the stock was beat up way beyond what was warranted. Bought in then and sold 7 months later for 43% profit. It wasn’t a large position size, but I was quite pleased! Now waiting for a Simon3 signal to get back in it. I understand what you mean about the trading grade, though. It’s a positive in the gain column, but my plan still needs work.


"I understand what you mean about the trading grade, though.


Totally agree. Just because a trade makes money doesn’t mean it was well executed. Conversely, if one follows one’s plan and yanks a losing trade in a timely manner, the execution merits an "A’.

Surviving in this game is all about consistency , discipline, and sticking with a sound plan.