QQQQs follow up

I ended up buying a lot more Qs for a trade than I expected to yesterday during that afternoon sell down. I had bids all the way down to 39.25, and never expected to get as many fills as I did.
I am paring back my Q holdings into this strength, simply as a function of size management.

For now, I am sticking with a very small trading position . . .

Incidentally, these sorts of posts give our attorneys ulcers and coronaries. At some point in the future, they will become exclusive to the research site (if for no other reason than my lawyer friends’ health).

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  1. LMAO commented on May 16

    these are the posts that i find most intereting. i value your oppinion and appreciate your willingness to share trading ideas.

    we are all big boys and girls and know to do our own due dilligence and such. tell your lawyers to chill out.

  2. Bynocerus commented on May 16

    Speaking of the research site…???

  3. rob commented on May 16

    i hope the research site has a student rate.

  4. Bynocerus commented on May 16

    Wait a second. You got filled at 39.25? How did that happen?

  5. B commented on May 16

    This isn’t a pretty market so far today afer a big bump at the open. We have a buyer’s strike. Of course, there is a second option to price pinning. Delta hedging could exacerbate a further decline this week……………….But, we are in a condition where we should really see a rally this week even without options. Someone needs to step up and buy something.

    Barry, can you kick off a buy program or two?

  6. trader75 commented on May 16


    Not to be obtuse, but what strength? Are you talking 10 minute chart?

    ‘Cause from a daily chart perspective, the Q’s still look the guy lying at the bottom of the stairs with a busted ankle.

    And from a weekly chart perspective, the year long uptrend that began in May of ’05 has been clearly voided / violated / invalidated etc.

    Maybe traders need their own special strength and weakness vocabular, like Eskimos with snow….

  7. Barry Ritholtz commented on May 16


    Not filled — just bidding all the way down — stock never traded never got below 39.79

  8. Mark commented on May 16


    Barry gets the “Friend of Larry’s” discount on his fills. When he starts getting the “Friend of Ben’s” discount, that’s when I buy his fund. :)

  9. ~ Nona commented on May 16

    Now we know why Shakespeare wrote: “The first thing we do, let’s kill all the laywers.”

  10. Bob A commented on May 16

    I have a monkey named Cramer

  11. B commented on May 16

    It’s our amygdala. Our basal fear processing that keeps us alive and makes us such awful investors.


    That is why good traders are either psychopaths and sociopaths. Don’t think I am kidding either. They don’t have the same emotional response normal people do. Why do you think Wall Street is always in legal trouble.


    High achievers in business often fit the same profile. Ever wonder how that CEO could cut 50,000 jobs and not give a hoot? Ever heard of Chainsaw Al?

    Drug addition, gambling problems, cheating on spouses, etc. All a profile of successful traders and business execs. I AM NOT SAYING everyone fits the profile or that it is even a majority.

    The moral of the story is that being a successful investor has less to do with being smart and more to do with mastering your emotions. Can you take the trade when it looks like hell is freezing over? You can make more money than anyone on Wall Street if you can only have a decent trading system that is correct 50% of the time and can take the trade and eat your losses quickly.

    People don’t understand this concept in general. The best traders on Wall Street are wrong more than right. I saw one of the top oil trading firm’s CEOs talk about how their trades are right 30% of the time. Yet they were swimming in profits. They have full time psychologists on staff as coaches. People think Wall Street is full of stock picking gods. That is ridiculous. They are idiots just like us. lol. That is why listening to the Motley Fool is a fools’ game. They aren’t clairvoyant. They should be teaching you psychology. Wall Street’s best can take the trade and admit their mistakes. If you suffer the emotional condition, you should not despair. You can condition your responses by exposing yourself to your anxiety often and learning to harness or, at least, control it. Just do it with a plan and do it with very small positions until you are more comfortable.

  12. Bynocerus commented on May 16

    I thought the lows were in that area, Barry, but I haven’t pulled up the charts today.

    Augmenting what B said, I’ve found that my best trades come when I’m absolutely scared to death to take action. It is when I am most elated or most despondent that taking the other side of the trade has been most profitable.

  13. Robert Sabuda commented on May 16


    Hurry up with the “research site” already! BTW, I appreciate you coming clean about your good and bad trades and having to back out of trades.

    Much better than some other guys I know who have fudged their results (Bob Brinker for example).

  14. Ricardo commented on May 16

    screw the lawyers!!! If it was for them we would have never made it out of the cave!!! (too much risk) In your left chest cavity you shd have an organ called a heart and it shd be beating. Ok, good! Now live a little bit!!!

  15. sam commented on May 16

    barry that’s a loser..QQQQ is going lower.

  16. angryinch commented on May 16

    The QQQQs should get a spring off the gapfill from Nov at around 39.30-39.40. How far it goes I don’t know. If that doesn’t work, it will likely fill the smaller Nov gap back around 38.40. I wouldn’t touch the QQQQs until 39.30-39.40. But we are close.

  17. ERIC commented on May 16

    Je vous dis bravo, bravo et encore bravo pour tout ce que vous écrivez.


  18. Barry Ritholtz commented on May 16

    I am out of the Qs; The shares purchased under $40 were a small winner, and the shares over 40.15 were a loser. All in all a few cents loss on the trade.

    I do not understand why people pretend to never have a loser; That’s a statisticially impossible scenario, so why pretend? Its goofy. In this game, if you hit .400 and manage your positions well, you are a moneymaker; bat .500-600 you are superstar.

    And I have long said I expect to be wrong, so its really no big deal. i have no ego tied up in a trade.

    On a related note, I moved all of my Power lunch Appearances from 2005 from TiVo to DVD this, and I checked out all the stock and market calls. Some really good, a few bad, a couple just awful.

    If I get a chance, I’ll have them entered into Excel and see how I did. The buy of MSTR at around $50 might make up for the short Google around $185!

  19. Mark commented on May 16

    Kinda lame-o rally here Boys.

    Barry, well done. Well said.

  20. Bynocerus commented on May 16

    Index Trades Only

    Lifetime batting average = .4877
    Biggest Draw Down = 37% (2000)
    Biggest Gain = 156% (1998)

    And yes, Mark, this rally does suck giant donkey pelotas.

  21. Chad K commented on May 16

    Post those results.

  22. Mark commented on May 16

    Bought the goldminer dip for a trade this morning and that is just kinda sucky too. Up 1.7% and I wonder if it’ll hold (was up 2.4%).

  23. B commented on May 16

    You know why people never say they have a losing trade. You just don’t want to indict anyone. I’m not that nice. lol. Well, I am when I take my meds.

    People wouldn’t subscribe to a service, theory, fund or advisor who said they might be right 50% of the time because the whole Wall Street crew does not give such full disclosure. And without full disclosure, someone is going to outmarket their competitors and get the client’s assets. And they’ll do so by misrepresenting their results. And getting the assets is the most important part of the game. Because the fees are what keeps people employed to pick tomorrow’s winner. No fees means no research or no crack team of traders or trading models or infrastructure needed to successfully invest. It also meant no Ferraris and multimillion dollar Manhattan penthouses.

    That is why Grantham lost half his assets in 2000. Because he was honest. A smaller firm could have collapsed by being honest. Many did. And it was why Clough lost his job at Merrill in 2000. And why Louise Yamada lost her job and why and why and why and why and why. Because they were rightly bearish at some point in their careers.

    Wall Street doesn’t want bears or honesty. That means they don’t get the customer’s assets. If they wanted honesty, they would have told everyone to liquidate stocks in 2000 and saved them trillions of dollars. But, they wanted the assets because regardless of whether equities went up or down, they made hundreds of billions in annual management fees. So, IF and only IF, hedge funds can outperform in bear markets and only keep up with the overall market during bull markets (and most are not really hedge funds IMO) they deserve higher fees. Because they are comp’d on performance not just fees regardless. That means performance in down markets too.

    I didn’t take my meds today.

  24. ~ Nona commented on May 16

    Glad you skipped your meds today, B!

  25. UndergradJonathan commented on May 16

    I agree that I find what Barry trades most interesting. I was involved in a trade with IBM back in march because of a certain break out I saw with it and after I executed my buy order, I saw Barry also noticed it too. Very reassuring..

  26. Bob A commented on May 16

    Reality matters, and there’s a lot of money to be made from distinguishing happy talk from reality.

    Maybe you need those meds B, but someone’s making money by selling them to you whose not likely to tell you if you don’t.

  27. Bynocerus commented on May 16

    Going back to pin action, the open interest on the Qs is exceptionally heavy at 41, and the puts are heavily in control, which makes me think come Friday…

  28. wcw commented on May 16

    Everyone has losers. Every option that expires worthless is a 100% loser, but that hasn’t stopped me doing okay with them from time to time.

    Over the 84 months through December, my monthly intercept vs six indexes (non-US emerging & developed, US large & small, non-US govts and vol) was 0.3%, but with only a not-significant-at-.05 t-stat of 1.3.

    I’m not a trader, so I don’t measure drawdown or Calmar.

  29. Jack commented on May 16

    I appreciate you sharing your trades. Even though you said you don’t have your ego tied up in this, I know an audience only adds pressure.

    You did not say “why” you dropped your QQQQ position. Markets no less oversold today as it was yesterday, is it?

  30. Larry Nusbaum, Scottsdale commented on May 16

    “At some point in the future, they will become exclusive to the research site (if for no other reason than my lawyer friends’ health).”


  31. Mark commented on May 16


    Out host knows quite a bit about the law himself. ;)

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