Here’s my story…. I’ve been trading nearly three years, pre-Covid since about October 2019.
I am completely self taught, opened several books, watch You Tube, avid Tasty Trade viewer, and am open to all viewpoints to broaden my mind. I’m still learning and every day is a new experience.
Now who hasn’t made a mistake or two? This is my biggest one yet.
I only trade one underlying equity at the moment, $AAL, and I only trade option positions, usually opening up about 20 contracts at a time. If I get assigned, I’m good. I use Fidelity as a brokerage and their Active Trader Pro trading platform. I find the platform extremely cumbersome, archaic and even detrimental to the retail trader compared to other trading platforms I’ve observed but I’m seemingly “married to it” at the moment akin to a co-dependent relationship. I’m working on slowly separating and starting to use other tools and platforms as a guide.
This week on 8/16 I went to buy to close twenty (20) $14 deep ITM Call contracts expiring 8/19 and to roll up and out. These are covered positions so my upside breakeven was breached and it made sense to roll up and out given $AAL kept pushing up. We’ve all watched the NASDAQ push higher. I “thought” I closed 20 contracts at a cost of $1.44 when the underlying was about $15.39. I trade option legs separately on individual tickets.
On 8/18/22 I noticed farther down on the option chain I still had my $14 calls open, and I looked further and it said I actually had a total of (-94) $14 short call contracts open. Yikes! I thought to myself, what the heck happened?!
So frantically, I looked to see what I could close these 94 contracts for at what price, and I was able to settle at .79 given the spread since $AAL had dropped down to $13.79/share in less than two days.
This goof netted me a profit of $4,700.80 after option commission fees.
Now, I’m not here to boast. I’m just damn lucky. It certainly could have gone the other way. This is an experience, and a very good reminder to all of us, especially newbies, to always check the trade ticket details before clicking “place order.” The Fidelity platform does some weird crap and I often experience some lag from laptop to my extended screen so I cannot explain how an addition 74 contracts were selected and my “buy to close” order got switched up to a “sell to open” on this major goof. When you’re trading several positions or you’re distracted, you may have several tickets open, any thing can happen. Mistakes happen.
Nevertheless, I wanted to share how these things can happen to anyone and if you don’t know how to get yourself out or compensate for a goof that may have gone against you, be aware. Trading is risky business even when orders are done correctly. It can be a lot of fun and very rewarding!
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