Jun

21

 I've been told that most people have recurring dreams of one sort or another. Many recurring dreams involve school, taking final exams without ever attending the class, or being unprepared one way or another. Recurring dreams are never good in my opinion.

Last night I had a variation of my most common recurring dream. I was trading on the floor while the pits were still open. I had suffered great losses for a few months and was down to the last $20,000 in my trading account. The grain market was in the middle of a great summer rally, crops were short, there was a drought, and the wheat prices were moving up 10-15 cents a day all summer long. However, I was scared money and not willing to even scalp a 5 lot without scratching.

It was about five minutes before the close and the market looked like it was going to have a very strong close, up 18.4 cents or so. I was looking at the board and saw KC start to weaken and my mind said something like "Reversion to the mean" and before I knew it, I was offering a million bushels of wheat at the buck. I immediately regretted the stupid decision to sell volume at this point, in fact, any other person would have s**t his pants. The broker at Bunge said, "Take it" almost before I got the offer out of my mouth. I carded the trade and said "Oh Crap" but thought to myself that the market might sell off in the next five minutes and I'd be OK. The market didn't trade above my million and now the market was trading down to .6 offer, then .4 offer, then .2 offer. The bids dropped and the market started to sell off about 3.6 cents on heavy volume. I decided to cover during the last 30 seconds with the market down a nickel. I turned my hands inward and started to bid frantically a cent over the other bids to cover the million bushels I sold. There was only one problem…..I completely lost my voice and nobody heard me. The final bell went off, the market closed, and I still had a 3 cent profit on a million bushels. Still, I was sick to my stomach.

I figured out that I could do what most people do after the market closes and they are either light or heavy….I sauntered over to a bunch of different brokers and tried to cover my position through "after the close" trading(this practice was very common back in the day). Unfortunately for me, nobody had any wheat for sale at the closing range price. I turned in my cards and headed out the door to the bar downstairs. About 45 minutes later, while nursing a drink, Cathy the margin clerk came up to me and said that I needed to deposit a check for $150,000 to carry my position. I told her that I was down to my last $20K and would just have to be liquidated when the market opened back up. The market opened limit up and my position was liquidated first thing and I was wiped out. I woke up in a cold sweat. When I finally got out of bed this morning, I checked the market.


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