How much were you losing each day? About $ 125 thousand a day. This was at a time when the average annual salary was $15,000.1 was not born
rich, and I couldn't stop thinking of my loss in those terms.
Could you put that loss in perspective relative to your account size? Before that trade, I had nearly $1.5 million in my trading account. So I was losing nearly 10 percent of my
equity level prior to the trade each day.
I was devastated. I felt like I was wounded in a trench and watching myself bleed to death. The market went
limit-down five days in a row, and I lost over $600,000. On the fifth day, I remember sitting in a park holding hands
with a girl I had picked up, literally crying on her lap. I was practically in a psychotic state. I thought about getting
out of the business altogether. I started to think that what everybody was telling me was true—maybe it was just luck
that I had made money all those years. I worried that if I continued trading, I could wind up losing it all, and being
forced to go back to some job I didn't like.
Which was more devastating, the large monetary loss, or your feelings about going from success to failure? It was the money and the limit situation, and the fact that I couldn't act. My exact thoughts were: Here I am,
a person who thought it was un-American to go short, and what I found out was really un-American was not being
able to get out of a position.
So you felt cheated by not being able to get out? I definitely felt cheated. To this day, I think there is something wrong with limit price moves.
Are you implying that price limits that were supposedly created to protect the public actually work against them by preventing people from getting out of their losing positions? Yes. I think the market should be totally free of restraints.
There is talk about putting limits on stock markets as a way of reducing volatility. Would that
