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Strategies & Market Trends : From the Trading Desk Bloopers and Blunders -- Ignore unavailable to you. Want to Upgrade?

To: steve goldman who wrote (11)	6/17/1998 1:37:00 AM
From: Ira Player	Read Replies (1) \| Respond to of 20

I also believe in keeping separate accounts, for separation of intent as well as diversification (don't put all your eggs at one brokerage!!). Longer term and tax advantaged accounts doing fine. taxable accounts doing terrible. Why? A relatively simple problem day traders do not have to deal with. Over consideration of the tax consequences of a sale. And I have to admit, I've now made the same mistake twice in 9 months. I have a couple of positions (one piece currently at Yamner) in stock obtained with ISO's (I do not wish to include the name / ticker) that has a very low basis. As the stock increased in value to a point I felt could not be supported, I sold some covered calls. Not knowing any better at the time, the calls ended in the money and I let some of it go. (I would now roll the calls out to a future date, with a higher strike. Thanks Steve G.) Looking at the stock price in August 97, I felt it was overextended, but didn't feel it would fall enough in the short term to justify the tax consequences, with only a few months left in the year to play before I had to pay. Wrong. It dropped over the next few months by 45%. I thought I had learned a lesson. Stock recovers, starts looking like it is within a range. Nothing to cause it to move significantly in either direction. Sell a few covered calls to generate cash. Stock moves up over several weeks, approaching it's previous levels. I believe the price will not hold, but don't believe it will fall far enough to cover the taxes. Down 50% again, and it's still in my account. Second time I learned. Really. I mean it this time ... Enjoy the ride, Ira p.s. I made other errors lately, but this is the one I am most annoyed by because it is pure dumb. The others were stretching the wings a little bit in areas I want to learn. (;^)>

To: steve goldman who wrote (11)	6/21/1998 12:21:00 PM
From: Dale Baker	Respond to of 20

A lesson for online traders. In January I bought some ISLI around 19 or so. It fell back to the high 17's, just above my stop loss order. I decided to give it some more leeway so I got on E*Trade and entered what I though was a new Stop-Limit in the low 17's. But because I wasn't thinking, I entered a straight Limit Sell instead. ISLI ran down just above what would have been my new stop then recovered more than a point. I check my account the next morning (I'm 8 hours ahead of New York here) thinking my ISLI gain would sure look nice in the portfolio balance and boom!...I see I sold at the open instead. Now after I enter a Stop Limit order, I call up my open orders to VERIFY that I actually entered what I meant to. It is very easy to hit the wrong button without noticing. Second Mistake - GOTK: heard about GOTK from a friend, liked the technology and bought after a press release. What I didn't know at the time was that GOTK was going for the world record in discount convertible financing deals, I mean about 20 in a few years. Watched the stock fall back and recover, fall back and recover, each time with lower highs and lower lows. Didn't know that the convertible holders were pumping the stock and selling into the rallies. Only after I sold and dropped $4K did I read the 10-K and learn about discount convertibles. Now I never but never go long a stock using this sort of crap, unless it's only a few hundred shares and I am strictly playing short-term momentum. GOTK is now worth a few pennies.