But everybody wanted volatility. That's when the register really started ringing. It was the day that the sun was so close to the earth that
everybody needed zinc ointment, and I was the only guy that had some left.
Let's take the other side of the fence: What did the traders who got buried in October do wrong? They took for granted that Monday would be a normal day. They started out long, thinking the market was
just correcting and was due for a bounce. Then they bought on the way down; they bought every dip.
Did some traders just freeze? Sure, some did. I have one friend, who is a million-dollar annual earner. On Tuesday morning, I walk in and
say, "Hey, Jack, what do you think? Are you going to get them today?" But he just stood there. He didn't say a word
to me. He looked shell shocked. He just kept going over his sheets, looking for something to do, but not knowing
what to do. So he missed all the opportunity.
Why was the way you responded to the market so different from the way your friend responded? He wasn't sure what his position risk was. I always define my risk, and I don't have to worry about it. I walk
into the pit every day with a clean slate, so that I can take advantage of what is going on.
A clean slate sounds like you come in with a flat position every day, but you obviously hold positions overnight. I mean that I'm always hedged, and I'm always prepared.
Do you always know the maximum risk in a position that you hold? Do you always know what your worst case is? Yes. Now, what could happen? The market sits, it explodes, or something in between. But no matter what
happens, I know my worst case. My loss is always limited.
Why do so many traders who come to the floor end up losing everything? I think the biggest problem with some traders that come on the floor is that they think they are bigger than
the market. They don't fear the marketplace, and they lose sight of their discipline and the hard work ethic. Those are
the traders who get blown out. But most guys on the floor really work hard.
