Odds and Ends

For a so-called derivatives trader, I've really been a spectator in the options market for quite a while. A lot of that has to do with my current job - I've been trading a lot of equity-based derivatives that are internally structured and which don't have any characteristics of traditional derivatives. It's also because, when I left the AMEX, I was very frustrated with the state of my trading. Some of it was because the AMEX was a giant black hole of spiralling depression where trading careers go to die. Some of it also was the realization that TASR was dead and was never coming back - no more $100,000 weeks ever again. And, maybe most importantly, some of it was because I felt like I had lost my edge. I wasn't excited about trading any more. I felt like I was going through the motions, like I didn't care whether I made or lost money.

To traders, this is the kiss of death. We love to win. No, really, we need to win. Ever play a board game with a trader? It's not fun, is it? We gloat when we're up, and refuse to admit defeat when we're down, even if the odds of a turnaround are so long we make the NY Knicks look like they have a good shot of winning the championship this year. We simply love winning so much at trading that it takes control of anything else competitive in our lives.

When I stopped caring about winning at trading, I knew I had to leave. I left the floor and got a job that I hoped would be intellectually stimulating and, maybe, rekindle that flame. While the job itself hasn't turned out to be as exciting as I'd hoped, some of the people I've worked with have reminded me about that competitive desire. I broke myself down, and started back at the beginning, with simple equity plays. I tried a few experiments, made a few mistakes, and got a little lucky.

But oh that feeling when I hit that first home run again. PWEI - I was in that name before Cramer had even heard of it. Long from $7.14 right before the run-up. I was back, dammit. It was like a drug - but better. I nailed on the head. My coworkers, who I'd told to get in on the name, were cheering me on for weeks after that one.

For the next year or so, my trading in my personal account picked up a lot. I had winners and losers, but overall I perfomed well. My confidence was back; I found my swagger. And today, for the first time since leaving the AMEX, I slapped on an options trade.

Nothing too exciting. Just bought a put spread in a name that I think is due for some disappointing earnings later this week. Still, it felt good. I could tell, though, that I'm a little rusty. I didn't check the vols before pulling the trigger, nor did I look at the earnings cycle to see how many shots I get. Still, it was a good feeling to be back in the game.