So far, it's been a good weekend for me. I finally managed to get some sleep during the actual night-time hours, and I woke up this morning to the dogs expressing their opinion of the thunderstorm raging outside. But the thunder and lightning didn't hang around too long, and soon enough it was just a nice drizzling rainstorm that was quite peaceful to listen to while I made a pot of coffee and surfed my way through my morning internet rotation.
I also exchanged a few emails this morning with my buddy Eddie B back in Phoenix, and I told him that I was 'starting to get the itch again', referring to going back and trading options again. No, not as a profession, but as a way to make a little extra income. Lately, a couple of the guys in the poker room have come to me seeking trading advice and we've been bouncing ideas around during our breaks, and that has got me thinking about getting back in the game.
Back in the day, before the bubble burst, me and my boys used to trade options constantly, and although somewhat risky, if you didn't get too greedy, there was plenty of money to be made. My favorite thing to do was trade contracts on the OEX (the S&P 100). There was plenty of volatility, which was good for premiums, and it was somewhat predictable. And I had a lot more hits than misses. My problem was that I was almost too conservative, and I left a lot of profit on the table.
But I wasn't the only one guilty of that. One time Ed W was bragging about how he did a quick hit-n-run on a load of Qualcomm options and had made about $2500 in just a couple of hours one afternoon between breaks during the trading class we were team teaching that day. So he was all happy and said drinks were on him that Friday at happy hour. The next day, the stock went through the roof, and had he held the position for 24 hours instead of just three, brothaman would've pocketed about $40,000 in profit. Heh. We gave him shiat about that for months. Whenever he got too uppity or started talking about 'his' Dallas Cowboys, all we had to do was say "Qualcomm!" and he'd curse at us and shut up for awhile, properly chastened.
Those were the good old days. I had damn near the perfect job--I'd teach a four day options class about every two or three weeks, which was great fun, and the rest of the time I'd be back with my team in the cube-farm, trading and talking options with clients, and doing margin sellouts on those poor fools who wouldn't listen to me and over-extended themselves. I had a thick three-ring binder full of my files on the 'frequent fliers' who I had to smack down almost every week. Basically what happened was that some folks were addicted to buying on margin like a crackhead craves the pipe. As soon as the market had a good day and their account value would increase, giving them a bunch of new buying power, they'd spend every dime of it on some speculative bullshiat, thinking that the law of market gravity didn't apply to them. Invariably, there would be a couple of down days, and since they were so margined up, they had no cash available to cover their margin calls. So I had to go all Collection Agency on their asses, but none of them would ever pay, so then I had to go in and sell off their riskiest positions to bring their accounts back up to minimum equity requirements. We called that 'Operation Yard Sale' and my margin notebook was labeled as such and decorated like the top secret nuclear launch codebook seen in Hollywood techno-thrillers.
I'll admit, I got a kick out of it, especially when it came to our worst offenders. But when I wasn't doing my real work, I was trading emails and ideas with Derek, Eddie B, and Ed W all day, figuring out ways to make a few bucks in the options market and the online sports books. Luckily I've always been a better options trader than I was a sports bettor. Hopefully that's still true, because I can't bet on football to save my ass.
But lately, now that I've pretty much recovered from the Dark Times of 2001-2002 when the bubble burst and forced me into a life of poverty, I've been thinking of getting back into the game. Especially during my breaks at work when I find myself at an empty poker table giving an impromptu trading lesson on the back of a cocktail napkin to a couple of dealers, the floorman, the waitress, and a random poker player or two that happen to overhear us and then come over to investigate.
It might be awhile before I get back into trading like I used to--it takes a bigger bankroll than playing tournament poker ever will (hell, spot-month near-the-money OEX contracts cost about a thousand dollars each!), but I think I'll do some smaller trades in the meantime to see if I still have the touch. Besides, Ed's waiting for me to have my own 'Qualcomm moment', just so he can return some of the shiat he took for the past eight years.
Mikey
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