Being stubborn and wrong is expensive

Trading options is a hobby from me. I do this for the fun and the excitement that it brings. It is also a good way to see how well I can manage emotions in investing and trading. Oh boy…

As the corona pandemic spread across the globe, it was crystal clear for me that this would have a major impact on the people and economy and thus the stock markets. Down down down was the way forward to me.

I thus positioned myself for a serious market correction with some of my options trade. And I waited. And then the central banks flooded the market with money, there are no alternatives for stock,… you name it. And the markets went up, and up and up. And yet, I did nothing, still convinced that the crash would come, soon real soon. Any day now. On Monday, for sure. It had too… Look at the data, it had to go go down.

So, here I am… I closed my positions in the mid of June for a total loss 434USD.

I did learn in the past a few lessons about risk management and risk defined trades. So, this clearly limited my loss. This event will mark the month of June. Do not expect big fat profits in the next option trading update.

I do hope that this post will teach me a lesson and that the next time, I will be more cautious in my approach and realise sooner that sometimes I can think to be be right, yet the market is always right. That is the place where I make my money with my hobby…


2 thoughts on “Being stubborn and wrong is expensive

  1. Aaah, this brings back memories. I had the same experience with forex trading. Good that you limited your loss, but it’s hard not to get caught up in the trading and loss more and more over time. Be careful!

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  2. In my opinion, I think it’s important to separate the emotions from investing. With the spread of the virus, it is very concerning, no doubt. How the market reacts to news, I can’t control. However, I can control how and when I invest, so I tend to focus on that.

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