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.