How My Life Went off the Rails Trading $AAPL Options

"For those two minutes, I was in profit... I was King of the world..."

"Any day can be the luckiest day of your life and you won't know it until you start gambling.“

"GAMBLING IS NOT ABOUT MONEY; IT IS ABOUT THE THRILL OF THE RISK.”

Written by Juliana Jones, author of the bestselling thriller HEDGED, the mInD oF An aDdiCted dAy Trader

I had a good feeling about Apple calls and Monday morning, August 24, 2020, I bought in. I broke all of my trading rules: 1. Never buy a stock at its high. 2. Never buy at the open. 3. Don’t trade in August or until the market has a clear direction 4. Set a stop loss. 5. Never go all in; average in.

But I buy August 28 AAPL 530 calls right at the open that expire Friday. I go all in and get printed at the high of 8.71. I had studied Apple and it was about to break out over 500 and the split is coming and all the data, charts, fundamentals show that the stock is going to run.

What could possibly go wrong?

It’s Apple. The most talked out, profitable company in the world. Everybody is trading it. Including my friend who works the cosmetics counter over at Saks Fifth Avenue in Beverly Hills. Even she is buying it. How can she know more than I? I covered hedge funds on Wall Street in an equity sales capacity. I was licensed Series 7 and 63. When she told me she bought Apple at a 52 week high last summer, I just kept saying, “It’s too high. You’re going to get burned.”

She wasn’t burned. She was up over 100%.

I wasn’t a buyer and holder of stocks. I had seen too much. Besides, I liked quick, fast, easy money. I traded volatility and that was a whole different story but let’s stay focused on the Apple trade.

Monday morning, I never expect the stock to open as high as 513. I had two accounts and I bought 100 contracts in one and 50 in the other, right out of the gate.

My account is down to its last $100k because I was short after the March 2020 Covid crash and got burned by Powell and the Fed and his QE like everybody else who was short.

But with the ten times profits you can make on options, I told myself, I could be at over a million dollars in no time.

That was my plan.

And I am the queen of plans.

My options get filled higher than I wanted but my account jumps from $111,000 to $122,000 in seconds.

Seconds! And all I’m thinking is this is going to be good… I should have jumped on this train a long time ago. And I watch …and I wait…and it’s awesome. I’m making bank. Until Apple drops 10 points within seconds. It breaks 500 and my account is disintegrating before my eyes. It drops so fast, I can barely fathom what is happening.

I can’t breathe.

I take the little money I have left in my account and I do what stupid people do on a losing trade. I average down. This is commonly known as the moron trade. Piling MORE ON to a losing trade.

I buy more contracts and my cost average goes down, and the stock begins to climb.

I’m out of the woods.

I now have a $7,000 profit.

It's too early to sell, I tell myself. Wait…

Because I want more.

I always want more…

I decide to take a shower. It's a good way to kill time. I’m writing a book and need to get cracking on that. When I come out of the shower, Apple is trading higher at 509 but my profits have cracked in half. I’m now only up $2,000.

This isn’t good. This is the decay they talk about in options. That's why I don't trade them. I always hated them. And now I’m getting buried in them. I have been asked a million times: “Why don’t you just trade options?”

“Because options expire worthless,” I’d reply.

Why didn't I listen to myself?

MOST OPTIONS EXPIRE WORTHLESS I remind myself!

But not mine. Mine won’t.

No.

It'll be different for me. I am after all,

Special.

Monday is a bad day. The stock is a behemoth. It takes so much pressure and volume to move it, and all I can feel is that it wants to go down.

Now I’m all in a stock that I never bought before and I never liked. I’m holding at an ALL TIME HIGH. I hate everything the company stands for and yes, I have an iPad, but I believe that this technology is just ruining people’s lives. I could go on and on, but I won’t. Because it doesn’t matter.

All that matters is this trade.

Apple closes down at 502 that day, and I hold overnight. I’m now down 50% on the calls. Maybe more.

It’s hard for me to look at this point. My $111,000 account has fluctuated between $122,000 and $59,000 with these options and it's been a rollercoaster ride.

One I want to get off.

The stock goes up after hours and I think everything is going to be fine.

But I don’t sleep because I keep watching futures.

At 1:00 in the morning, someone posted that Apple is trading at 111 in the overseas markets. We are all overjoyed. Our calls will be saved! We will live to trade another day!

I finally fall asleep and wake up four hours later. I grab my phone and check pre-market. Futures are up and Apple is in the red, down 3 points.

Every time I have ever checked Apple, it was always green, always up.

And as soon as I buy it, it turns.

Isn’t that always the case?

I feel sick.

I watch the open.

If I there ever was a time I could give back one trade – just pretend like this whole thing never even happened -- this would be it. All traders should get a chance at one DO OVER. A redue. That one trade that they could give back.

I open my Etrade account and my balance is $42,000.

I’m f*cked.

The stock is dropping.

I can’t breathe.

I have been in this situation before, I just can't afford to lose this money. Not again.

Between the quarantine and being so isolated for the past six months, my day trading has gone off the rails. I weigh 95 pounds. I’m only 5 feet, 5 inches. I study trading 20 hours out of the 24 hours day.

Because my car is dead from not driving it and I have no where to go anyway, I walk to the grocery store for food. I tried Instacart but who wants to pay $8.99 for a package of Oreos? The groceries are heavy and I can barely lug the laundry detergent and the heavy water bottles the ten blocks to get home. My arms become ripped from carrying these bags. Pun intended; the grocery bags and my trading bags. I am sunburned because the only escape out of my apartment is my ten mile jog on the beach everyday. It hasn’t been the easiest of summers or year for that matter.

But some days are great.

The days I am winning.

The days that I am trading and making $3,000 – $14,000 a day.

But on the days I’m losing, it’s hell.

Pure, unabridged, unstoppable hell.

I don’t have that much money to begin with. I have been putting my unemployment checks into my trading account. I didn’t know when I would get work again. And quite frankly, I didn’t care.

I mean, who wanted to work? Besides, I can make in one week what most people slave to make in a year.

And things were pretty damn bad no matter which way you sliced it. During Covid, my world got very small. My friends; it was hard to talk to them sometimes. Usually in a friendship, one calls the other with good news or bad news and you either listen and console or congratulate them and buy them dinner. But now, everybody seemed to be in the same boat. Everybody was sad, depressed, worried. Nobody could go anywhere. Nobody had good news. The conversations became fewer and farther between. I was isolated.

Alone.

Trading became my life.

It had always been my life. But now it was really my life.

I had nothing else going on.

As I watch Apple go lower, I realize I’m not getting out of this trade alive.

I call Etrade and wait on hold for forty minutes. I see there’s a way I can “roll the options,” but have no idea how. I need more time. Maybe this can buy time.

These options need to move by Friday! Or they all expire worthless. I’m in the August 28 calls and I have everything riding on this.

As I wait, Apple starts to rise.

There’s hope, I tell myself. I get frustrated being on hold and I hang up.

F*ck Etrade. I’m a trader. I know exactly what I’m doing.

I decide to get up and get some water, and I come back in a few minutes.

The stock has gone lower.

My account is now under $30,000.

I call Etrade again and this time, wait thirty minutes on hold.

I pray I get someone good on the phone. Someone who has an answer for me. Being that I worked on a trading floor and most of my work was done over the phones, I have a very quick read of someone on the phone. Finally, a guy gets on the line. He sounds young but he’s calm and sounds intelligent. But what I do next is something I never do.

I start crying.

I can’t even believe it.

“I don’t know how this happened. How can $120,000 be wiped out in less than twenty-four hours? This is everything I have. I can’t lose this money. What are my options?”

On these options that are destroying my life.

He speaks evenly.

He doesn’t make fun of me.

He doesn’t laugh, and he doesn’t yell.

He doesn’t say, HOW COULD YOU BE SO F*KN STUPID? YOU STUPID, STUPID GIRL! WHAT HAVE YOU DONE?!

I’m embarrassed. “It’s APPLE,” I plead, “how can this go down? If I roll the contracts, will that buy me time?" I ask about the split. I’m grasping at straws. He can hear it in my voice. I’m desperate.

I hear him breathe on the other line. His voice doesn’t change. He’s steady.

Thank God for this. Thank God.

He is the life jacket right now and I am drowning.

I am blowing up.

He puts me on hold.

I wait.

Apple ticks up. It’s trading at 495 now. But I am still f*cked! I BOUGHT CALLS AT 512! AN ALL TIME HIGH! I want to kill myself.

Honestly, as I’m lying on my couch, waiting for him to come back on the phone, I wish that I am dead.

It occurred to me once to purchase a gun after LA got so dangerous and I was afraid all the time. But could I every hurt anybody? I didn't think so.

But would I hurt myself?

The guy gets back on the line.

Now his voice is shaking. “Umm Juliana, yeah….” he begins, “Well, look, it looks like… basically….”

I hold my breath. Come on. Give me something.

“Basically, the split is going to impact your options,” he says, “and it looks like, in a negative way…”

I tune out for the remainder of the conversation. The stock is dropping and every second that we’re on the phone, I’m losing more money.

Every time I hit refresh on my “APPLE iPad,” (how perfectly maddening) my account fluctuates up and down $3000.

A SECOND.

I only have $26,000 left.

“What’s the break even price I need to get to on Friday to get out of this alive?” I ask.

I should know this and I probably do; it’s in the back of my mind somewhere, but maybe he has a better answer for me.

“Let me figure that out for you.”

I wait.

I can’t imagine what I’m going to do for money now if I lose everything. I can’t imagine how I’m going to survive.

What’s worse is, WHAT ON EARTH WILL I DO ALL DAY LONG IF I CAN’T TRADE?

He gets back on the line. “The options look like they need to hit… 537 Friday.”

I swallow.

There’s no way in hell Apple was going to go that high by Friday. Unless there was a miracle. I need one now.

The whole market goes red and is rolling over. Everybody in the SPY message boards is saying that the market is so TIRED, so spent. And in the back of every trader’s mind, is always that question: "Is this the crash? Is this the big one?"

We all know it’s coming.

But until then…

Ride it out…play the game, pocket the money, take the ride.

Ride out the wave for as long as you can and make sure it's good because you know it ain't gonna last....

Just don’t be the last one out the door.

“So should I wait?” I ask him, knowing the answer to my own question. “To sell?”

If I wait and the options don’t hit 530 Friday, they will expire worthless. My account will be zero.

If I sell now, I can walk away with $26,000.

“Can you sell for me?” I ask, afraid to take my own hit. “Can you just get me out of this with $26,000?”

But I know the rules. By the time he walks me through the long verbal disclaimers to place the trades, I will only lose more money.

It will take too long.

I have to sell this second! NOW!

This trade is getting further and further away from me!

And I think I just pretty much black out after this.

The moment reminds me of the day at Veterinarian’s office when my cat died. It was time to put him down and I begged and pleaded with the doctor, “Please, I don’t care how much it costs, can you please just keep him alive a little longer? I have the money. Can you just keep him going?”

I paid and paid until the money didn’t matter anymore. It wouldn’t save my cat in the end.

And that was this day.

I stared into that Doctor’s eyes watching as he shook his head and uttered his words, "No, I'm sorry." It was like my world was coming to an end. He was quiet and soft spoken, “There is nothing more we can do."

And then I hear the Etrade guy, “There’s nothing more we can do.”

When the doctor told me this that day at the Vet, I took my cat outside for one final goodbye. We sat on the curb on Sunset Boulevard and he was in my arms and I cried and I cried. I got up and finally brought him back inside so the doctor could put him down.

It was over.

It was the worst moment of my life.

And now I was putting my account down.

For good.

I suddenly realize that the Etrade guy is no longer on the phone and I am crying again.

He had left me alone to end my account.

The same way the doctor did with my cat.

I hit the bid and click, “Execute trade.”

It’s over.

My account is dead.

* * *

For the rest of the day, week, month, who knows, I am a zombie.

I call my best friend in New York. “I’m coming home,” I tell her. “I need to get a job. I need to get my life back on track.”

The fact was that my life had been “off track,” for a really long time.

I was living in LA for the dream to become a writer. And I was struggling like almost everybody else in this town.

So the idea of going back to work after making thousands with the click of a mouse and being around people I know I won’t like just pushes the knife further into the wound. But I try to put a positive spin on it.

“My Dad will be glad to have me home,” I keep saying. “I’ll just go back to work. I’ll get a job at a hedge fund. I can make a good salary…”

I know I can’t be a working trader because AI took all those jobs years ago…

She agrees and listens some more.

We are on the phone for two hours.

I can’t get off the couch. I haven’t eaten. And I haven’t slept.

And now, I can’t trade.

And in the back of my mind, I just want to end it all.

The thing I spent 90% of my thoughts and time on, was done: Trading. It was better than a lover, it was better than a friend and I was obsessed with it.

“It’ll be good for you,” she kept saying but I barely hear her, I'm just drowning in my own grief...

We hang up, and I can’t be alone. I need to call someone else. I call a woman I always admired. Older than me. Successful. Has her shit together. When she gets on the line, she’s excited to hear my voice. “How’s it going, Juliana?”

I can’t speak.

I’m speechless.

She was the one who told me for years that I had a “Gambling problem.“

But my money was none of her business, I’m a F*CKING TRADER. I CAN AND DO BEAT THE MARKET ON A DAILY BASIS. TODAY WILL BE NO DIFFERENT, I'd always tell myself.

But today was different.

I blew up.

On f*cking APPLE.

WHO LOSES MONEY ON APPLE??!?!

I start crying again. She’s never heard me cry. You can punch me in the stomach and knock me down, but I’ll get up bruised and battered and beatened, but I will always rise again.

Now I was down for the count.

I had no fight left in me.

And I could not keep living like this.

My life was contingent upon waking up and checking futures asking: Am I up or down? Will I be happy or sad today? And the truth was even when I was making money, it was never enough.

And when I was down, I had a bad habit of calling the bank.

Just call the bank and get another cash advance on the credit card. What do I care, I’m going to make it all back, aren’t I????

This was how I lived.

On the edge.

Culd there be any other way?

“What happened Juliana? You don’t sound right.”

“I lost it.”

“You lost what?” she asks.

What does she think? “The money.”

The shock of this statement rolls over me like a bad dream.

“What do you mean, everything?”

“My trading account. I blew up. Down to $25,000.”

She says, “Well, you didn’t lose everything, you still have $25,000 left.”

Suddenly, I feel hopeful again.

I CAN TRADE THAT 25K AND DOUBLE IT, TRIPLE IT, AND GET MY ACCOUNT OVER A MILLION DOLLARS!!. I CAN GET MORE BANK LOANS. I CAN JOIN ONE OF THESE TRADING COMPANIES LIKE MAVERICK TRADING AND TRADE WITH THEM…I CAN COME BACK!

I ALWAYS COME BACK!

But over my own thoughts, I hear her voice: “So what you’re really saying is that you hit a bottom in your gambling addiction.”

And there it is.

I pause.

Her words sink in.

“Yes."

The instant I say it, it’s a load off.

I’m surprised.

She suggests I reach out to them for help. She asks if I know of anybody who can help me. I do.

Because if you don’t know anybody who blew up worse than you did on Wall Street, then you’re really not a trader.

I call my friend David and he’s expecting my call. He has taken me to some of his Gambling meetings before and I never liked them.

But what I liked even worse was what I had become.

The truth was, I running a small account and I was obsessed with it. And would trying to make it go back to $300,000 or $3,000,000 even worth this?

When would $3,000,000 need to be $30,000,000?

What was I even contributing to the world?

I felt sick.

I couldn’t go on.

And for the first time out loud, I admitted, “Yeah, you’re right. I need help.”

* * *

The next morning, I wake up and the first thing I do is check futures. I can't help it. I look to see where Apple is trading and I wonder if I held on, would I have gotten more money?

Or would I be left with nothing?

It’s hard to look.

I need to get a real job and I need to make a living. I need a routine and I need to be out and in the flow of life.

Truth be told, I don’t really know if I am done with trading.

There is nothing anybody can say to me to make me feel any worse than I already do. I have scraped the bottom of the barrel.

I have found that small hole and I have fallen through it.

I was in a free fall and I crashed hard.

I can’t say for certain that I will never go back to trading.

But I think I need to try.

* * *

H E D G E D

💕💋