Dark Chocolate Covered Peppermint Altoids Atop a Croatian Table Topper

Today, I completed six options trading classes, and I've moved beyond the easy, beginner ones to the wicked, harder ones.  I have been using yoga deep breathing and popping Dark Chocolate Peppermint Altoids for the past three hours, as a means of coping with trying to get straddles, strangles, condors, butterflies, puts, calls, long, short, bull, bear, debit, and credit into my brain.  I passed six tests (let it go).  What I'm learning is that there are so many things an investor can do to lower risk of stock ownership.  Shoving your money in a mutual fund and forgetting about it (aka "buy and hold") is a strategy you may pay for when the market goes into wild gyrations as it has done since January. Think of it as your retirement being postponed. Ouch.

The table topper on which the Altoids are shown was one of my favorite finds from Split, Croatia.  Only 70 kuna ($11.67 in today's USD but I think about $10 when I was there).  All handmade.  In the summer, I use this lovely without an under table cloth (worrying, of course, that the table might get hot and sweaty, too).  At Christmas, I compliment the topper with festive red underneath.  Either way, the topper reminds me of a fun morning spent shopping at the outdoor market near the Diocletian Palace in Split.  I wish everyone could feel how soft and light the fabric is, and really see the intricacies of the crocheted sections.

Lost a Cool $20 Million Today ...

I was in the midst of a compelling analysis to compare the buy-and-hold versus active trading stock portfolio management strategies, when what to my wondering eyes should appear on my trading screen ...

Portfolio Value: ($20,999,999.01)

Oops I know the market's down today and Greece is in the midst of a big fat riot, but ... but ... $20 million? Cha ching. Negative $20 million?

I could not even fathom the scenarios which might have caused me to not only lose every penny of shareholder equity, but go into a financial bottomless pit. Could I have fat fingered some eight digits when I wasn't even trading at the time?

I realized from this point forward I'd be living a life of free Einstein bagels and schmears ... forever.

It's one thing to recoup a few hundred dollars in bad trades, but $20 million? Then the trading platform shut down.

I don't really have a vocab like a sailor either in speaking or print, but just the same, I'm surprised I didn't say a few choice words. Well, this is probably because I couldn't say any words.

I was on the phone to my brokerage to find out if someone had broken into my account or ... what. In the haste of the moment, I recalled, not fondly, the time when the voice response system chicklette for my cell phone company informed me that my balance was over $1 million. That event, no doubt, prepared me for today. And then it hit me ... Mercury is in retrograde (had to throw this in for the astrology junkies). May 11th can't come too quickly.

While holding on the phone, I emailed my brother and advised of my plight. After a reasonably short wait of under ten minutes, I spoke with a representative. I learned that apparently, right around the time when my brokerage account went into convulsions, a trader or a trading glitch traded at 1000x the expected amount, so a $16 million trade became $16 billion. Whether a financial institution relies in manual input or automated system entries, ... well, I'm not going to give a brain dump on operational risk but suffice it to say accidents happen. Where were the controls? testing? monitoring? etc?


The impact of this "glitch" on the broader market was immediate, and the Dow dropped by a whopping 998.5 points, taking every stock in the market correspondingly up or down depending on the degree to which it correlated with or against the Dow. And the New York Stock Exchange realized a circuit outage. I have to wonder how many buy and sell orders were executed during the half hour or so when things were unbelievably haywire, and how long all of that may take to unravel. Eventually, by day's end, the Dow settled at a drop of 347.80. The charts will remember this day for a long time.

Ouch.