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
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. I go all in and get printed high 8.71. The high. I had studied Apple over the weekend, and it was about to break out over 500 and the split is coming and all the data, charts, statistics show the stock is going to run.
What could possibly go wrong?
It’s Apple. The most talked out, profitable company in the world. Everybody was trading it. Including my friend who works in cosmetics at Saks Fifth Avenue in Beverly Hills. How can she know more about the stock market than me? I was previously a Senior Vice President at Morgan Stanley in New York. I covered hedge funds in an equity sales capacity. I was licensed Series 7 and 63. When she told me she bought Apple at a 52 week high the summer of 2018, I just kept saying, “It’s too high. You’re going to get burned.”
She wasn’t burned. She was up over 100%. Even after market collapse of early 2020.
I wasn’t a buyer and holder of stocks. I had seen too much. Besides, I liked quick, fast, oney. I traded volatility and that was a whole different story; one I will get into later, but let’s stay focused on the Apple trade.
Monday morning, I never expected 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 March 2020 initial 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.
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 wait…and it’s awesome. And I’m happy. And 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 wait. 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. My average goes down.
The stock begins to climb.
I’m out of the woods.
I have a $7,000 profit.
Too early to sell, I tell myself. Wait…
Because I want more.
I always want more…
I go and take a shower. 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. And this is why I never traded 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!
But not mine. Mine won’t.
Not this time.
It’ll be different..for me.
Monday is a bad day. The stock is a behemoth. It takes so much pressure and volume to move the stock, and all I can feel is that it wants to go down.
I’m all in a stock that I never bought before and I never liked.
And I’m holding at an ALL TIME HIGH.
I hate everything the company stands for and even though I have an iPad, I believe that all of this technology is just ruining people’s lives. And all the executives at Apple were pompous and taking over the world with their wealth. I could go on and on, but I won’t. Because it doesn’t matter.
I’m only here to tell you what happened to me.
Apple closes down at 502 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 fluctuated between $122,000 and $59,000 with these options and it was a rollercoaster ride.
One I wanted to get off.
The stock went up after hours and I thought everything would be fine.
But I didn’t sleep because I kept watching futures.
At 1:00 in the morning, someone posted that Apple was trading at 111 in the overseas markets. We were all overjoyed. Our calls will be saved! We will live to trade another day!
I finally fall asleep and I wake up four hours later. I grab my phone and check pre-market. Futures are up and Apple is 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.
The stock is dropping.
I can’t breathe.
I have been in this situation before, only now I’m on my last shred of patience.
Between the quarantine and being so isolated for the past six months, my day trading has gotten off the rails. I weigh 90 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 $6.99 for a package of Oreos? The groceries are heavy and as I lug the laundry detergent and liters of water ten blocks 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 to jog 10 miles on the beach everyday. It hasn’t been the easiest summer or year for that matter.
But some days are great.
The days that 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, complete hell.
I don’t have that much money to begin with. I was putting my unemployment checks into my Etrade 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 1 week what most people slave to make in a year.
But things were pretty damn bad no matter which way you sliced it.
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 was 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.
Trading became my life.
It had always been my life. But now it was really my life.
In a big way.
Because 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 me it.
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 impatiently on hold, Apple starts to rise.
There’s hope, I tell myself.
I hang up. F Etrade. I’m a trader. I know exactly what I’m doing.
I decide to take a shower and come back in a few minutes.
I do but the stock has gone lower.
My account is now under $30,000.
I call Etrade again and wait thirty more 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 within the first 5 seconds of speaking to them. Finally, a guy gets on the line. He sounds young, but he’s calm and sounds in control.
But what I do next is something I never do.
I start crying.
I can’t even believe it.
I never cry.
The conversation goes something like this: “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. You’ve got to help me. 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, what I think he’s going to say which is: YOU STUPID, STUPID GIRL. WHAT HAVE YOU DONE? HOW CAN YOU BE SO F*CKING STUPID?
I’m embarrassed. “It’s APPLE,” I plead, “how can this go down? If I roll the contracts, will that buy me time? What about the split – will the split help the contracts by doubling?”
I’m grasping at straws. I know I am.
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.
Apple ticks up. It’s trading at 495 now. But I am still f*cked! I BOUGHT CALLS AT 512! AT 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 once occurred to be to purchase a gun for protection because in LA, where I’m living, in particularly, Santa Monica, the protests were so bad, so horrendous, I was afraid all the time.
But I could never shoot anybody.
But would I hurt myself?
The eTrade 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.
Hellllpppp me. Please.
“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.
I only watch the stock tick lower and lower.
It’s dropping and every second that we’re on the phone, I’m just losing more more money.
Every time I hit refresh on my “APPLE iPad,” (how perfectly maddening) my account fluctuates up and down $3000.
I only have $26,000 left.
“What’s the breakeven 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 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.”
There’s no way in hell Apple was going that high by Friday. Unless there was a miracle. And I needed one now.
The whole market is red now and rolling over. Everybody in the SPY message boards was saying that the market was so TIRED, it’s spent. And in the back of every trader’s mind, is always: is this the crash? Is this the big one?
Because we all know it’s coming.
But until then… Ride it out…play the game, pocket the money, take the ride, like a wave and ride it out for as long as you can…
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, and I lose everything.
My account will be zero.
If I sell now, I can walk about away with $26,000.
“Can you sell for me?” I ask him, ever so afraid to take my own hit. “Can you just get me out of this with $26,000?”
But I knew 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.
And I had to sell this second.
This trade is getting further and further away from me.
I think pretty much I just black out after this.
The moment reminded 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.
As I stared into that Doctor’s eyes watching sadly, as he shook his head and uttered his words, no. He was quiet and soft spoken, just like this Etrade guy. “There is nothing more we can do,” he said.
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 and I cried.
I got up and finally brought him back inside so the doctor could put him down.
It was over. The worst moment of my life.
And now I was putting my account down.
And as all this is happening, I 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 I click, “Execute trade.”
And 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.”
But this idea of this rattles me.
And the fact is my life had been “off track,” for a really long time.
I was living in LA for the dream to be a writer.
And I was struggling except for the successful few like everybody else in that town.
And so the idea of going back to work after making thousands with the click of a mouse for years and being around people I probably 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 an Executive Assistant 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 she listens.
And I cry some more.
We are on the phone for two hours.
I can’t get off my 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, drowned out by my own grief..
We hang up, and I can’t sit alone.
I need to call someone else. I call a woman I always admired. Older than me. Successful. Has her shit together. She was older and like a mother figure to me. My own mother was abusive; physical and verbal but I stopped hating her for this because I knew she didn’t mean it and she couldn’t help it. As a result, I was able to endure a lot of pain. And a lot of pain came from trading and from Wall Street. Whether I was on a trading floor trading other people’s money or trading my own, you couldn’t knock me down because I was inwardly torchured so you can yell and scream at me but you can’t break me.
And in the end, when I started trading my own money in my own accounts, the fight was no longer with the clients but with Mr. Market himself. And it was always, “You got me this time, Mr. Market, but I’ll be back. I will come back and I will win.”
As if somehow, if I beat the market, I would get my mother’s approval.
But I never did.
You’d think I’d learn my lesson.
But I never did.
It was always the same pattern. Lose money, blow up, go back to work. Amass enough to trade again. Then. Rinse, repeat.
When Beverly gets on the line, she’s excited to hear my voice. “How’s it going, Juliana?”
I can’t speak.
She was the one who told me for years that I had a “Gambling problem.“
But my money was none of her business, I’d tell myself. I’m a F*CKING TRADER. I CAN AND DO BEAT THE MARKET ON A DAILY BASIS. TODAY WILL BE NO DIFFERENT.
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. Crying is for wimps. 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.
Here’s the numbers of my trading history over the past few years.
And for a real trader, the numbers are better than porn in my opinion. Because it’s the real, raw, juicy stuff.
So in February 2018 I went long TVIX, trading and making bank on volatility until the trade went against me. My account was about $150,000. But it got chopped in half because volatility goes down so quickly.
So my $150,000 turns into $75,000. I know these numbers are small to some people. To other people, they may be big. But it was all I had.
And when I’m down, I have a bad habit of calling the bank.
I call the bank and get a cash advance on a credit card for $40,000. Yes, on a credit card. What do I care, I’m going to make it all back, aren’t I????
And I dump it all into TVIX to average down.
The stock continues to crater.
So I got more bank loans. 7 in total. Or was it 8?
Who was counting?
And interest rates? What’s that?
I quickly amass over $70,000 in credit card debt.
Then TVIX reverse SPLITS 10 FOR 1.
Not once, but TWICE over the years!
I stay in and I don’t let go.
I keep averaging down.
For years, I was in turmoil, stressed out and broke. People on stocktwits were laughing at me.
I didn’t care.
But in February, 2020, right before Covid hit, my Etrade account was at an all time low and my debt at an all time high.
I was about to file for bankruptcy.
What choice did I have?
I had $80,000 in credit card debt and no job. I was even putting my rent on credit cards and my credit cards were tapped out!
Then: CUE IN THE STOCK MARKET CRASH OF MARCH 2020!!!
JUST LIKE I ALWAYS EXPECTED….
I’M BACK IN ACTION!
MY ACCOUNT CATAPULTS TO $311,000!!!!!!
I sell TVIX at 402!!!!
I’m a star on Stocktwits!!! I have a blog and people are flocking to my website and I’m making money on my Google ads.
LIFE IS GOOD!
I’m a f*cking rock star!!!!
The first month in the quarantine, I make another $40,000. I only used a small portion of my account to trade with, and I would go long and short volatility at the same time. I was hedged.
TVIX SKYROCKETS AND NOW I’M SHORT WHEN TVIX hit 1000!
I got a margin call. I’M about to blow up my account again!
But then TVIX drops back down the next day, and I’m saved.
This was how I lived.
On the edge.
Always on the edge.
Because could there be any other way?
The rest is a blur. Powell ruins it for everybody. QE and the markets climb on nothing. I’m short, long, who knows, I’m on the wrong side of every trade and for the next three years, I slowly, painfully, implode.
Not a quick rip like the AAPL trade gone wrong, but a slow, bleeding decline; one that ruins your soul and your dignity.
I talk more with Beverly.
“What happened Juliana? You don’t sound right.”
“I lost it.”
“You lost what?” she asks.
What does she think?
The shock of this statement rolls over me like a bad dream. Only I am living it.
“What do you mean, everything?” she pushes.
“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 thoughts, I hear her voice: “So what you’re really saying, what you are really trying to tell me here, is that you hit a bottom in your gambling addiction.”
And there it is.
Her words sink in.
The instant I say it, it’s a load off.
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 $100,000 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.”
* * *
But the next morning, I wake up and the first thing I do is the first thing I always do, which is check futures.
I check to see where Apple is trading and wonder if I held on, would I have gotten more money?
Or would I be left with nothing?
It’s hard to look.
I feel sick and I have no energy.
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.
But at the heart of it is this: I don’t really know if I am done with trading.
And 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 perhaps I need to try.
* * *