Davey Day Trader hit by margin calls

That distant howl that you can hear is the collective screams of a million millennial daytraders going up in smoke:

Each new generation thinks it is smarter than the last and that they are the first to discover how easy it is to make money on stocks “that only go up”.

What DDT is going through here, many of us went through twenty years ago in the first tech wreck. For me, it is bizarrely reminiscent of my own set-up at home. Music, chat rooms, refresh, refresh, refresh as my “new age” portfolio boomed for six months. PhD research forgotten.

But then the refreshes started to get more painful and compulsive and the phone started to ring with calls from my margin lender…

And day after day stocks went down.

David Llewellyn-Smith
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Comments

  1. Maybe they should have stuck to crypto-currencies?

    Real men stick to trading Aussie property – that game is so rigged prices only ever go up. Your margin lender is the RBA, whose board members play the game too.

  2. I’d like to see a nice 10% correction in the NASDAQ overnight, which would really dampen the spirits of the robin-hood geniuses. Nothing like panic selling to cover margin calls of your “diversified” portfolio coinciding with your stimulus cheques ending. Popcorn from the sidelines.

  3. Thanks for the memories!
    I’ve spent 20 years and a small fortune on plonk just trying to forget.
    I still remember the insanity, my nose still tingle from just the mention of coke and I can still smell the sweat from the last lap dance. Ah the good times.

  4. happy valleyMEMBER

    “Each new generation thinks it is smarter than the last …”

    And today’s lot are playing against serious HFT and proprietary traders, CBs and PPTs rigging markets. Good luck with that.

    Day traders (the mighty Chris Becker aside) these days (as indeed are retail investors more generally?) can only go along for the ride so far, before they become the cannon fodder they were always destined to be?

    • @happy valley
      Yeah no need for war or conscription canon fodder to keep numbers down #eugenics #population control when you have day trading & housing…..9 young Aussie blokes apparently die each week from suicide, (depression .. mental health… financially over extended of can’t get laid/romances cos no mortgage …so life not worth living…not just young Whyte blokes but all ages…it’s a trend. Go straya

  5. Love hearing tech-wreck war stories. One friend of mine nearly sold his dot-com stocks when they were only half way down; he set up the trade and hovered over the “Confirm” button for 20 minutes, but chickened out. Of course, we all wish we had sold pets.com and bought AAPL when it had a market cap of $6bn.

  6. Clearly the guy is just running a production and taking the piss (have to admit his trolling of wall street names was pretty funny at times). My understand is that his wealth was accumulated well away from this and a million here or there to ‘day trade’ is just a game. Assuming he didn’t buy into his own BS he will be A-OK, not so for the muppets who actually take him seriously!

  7. I took the day off work to do some daytrading once.
    Turned on the TV, world trade centre had been hit by planes.

    and that pretty much describes how good I am at timing the markets.

  8. Stewie GriffinMEMBER

    The GFC. Buying penny dreadful miners and thinking I was discovering alpha, when all I was doing was buying leveraged beta. Managing the margin kept me awake at night (never got a call), needlessly and endlessly checking indexes in the middle of the night and then not being able to get back to sleep and the worst, confessing the losses after all the gains, bravado soon turns to terror. Lucky to come out evens in the end – the lessons of course were priceless.

  9. Some guy on a FB group was talking about Tesla and how cheap it was at $500 and would go to $2000. Not sure if he was trying to convince himself it was cheap and getting confirmation from others to back his buy.

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