Trading Notes -- 20190220 Wednesday

Added on by C. Maoxian.

Poz tone for the SPY yet again. Never a down day, for months now. PO HTBs KNDI, CLSD, RIOT … interestingly IB had a few shares of KNDI and CLSD which I anticipated would all be pre-borrowed and was correct about … RIOT is full red unshortable … KNDI squeezed all morning and into 13:30 and I shorted C&B and eventually A off of PO difangs, IB gave me a very nice fill on the A since they ran out of borrows in the morning then found some in the afternoon and filled me right then (near top tick of course) … would have been awkward if I wanted to add at C1 and had no shares available, woulda been a major bummer but it didn’t happen. KNDI has had a $300M shelf in effect for a year and a half now and this NHTSA approval the perfect spot for them to sell into, but we’ll see. Able to carry since not paying 7x for the overnight barrow, ha! CLSD a little more straightforward, shorted C&B and could have added A but they ran out of borrow (didn’t pre-borrow enough, same as KNDI), woulda been near top tick (of course) but I’m fine with this ave and will hold into a StuckAtaProfit day(s) and eventually cover out for the expected gain (he says confidently (hopefully?)) … they did find 20K more shares after hours, but we’ll see about adding them, probably won’t.

Movies Watched -- Custody (2018)

Added on by C. Maoxian.

In French. 93 minutes, so the right length, but so grim I had to watch it at 1.5x ffwd. Custody battle, 11-year-old boy and his teenage sister caught in the middle. Father, a hulking brute, is menacing in a Tony Soprano-ish way. Doesn't have a good relationship with his own old man, gets thrown out. Ugly biz. Father snaps in the end. Miserable, who wants to watch this kind of thing? Not a thriller, don't know why it's categorized that way. Yellow rating at best.

Don’t hit Mom (or me)!

Don’t hit Mom (or me)!

Trading Notes -- 20190219 Tuesday

Added on by C. Maoxian.

Broad tone poz, god forbid there’s a down day and never ever two in a row…. PO HTBs: SKYS ORPN ARTW … shorted SKYS (0.18 borrow) at PO C covered half at minC, didn’t hit Typ3 before close, wasn’t going to carry at 7x cost, SKYS was only FIDO in morning though of course crowded out by day end … RIOT full red at IB came alive (latecomer) given BTC rally, put in big run, gave many good spots (secondary and even tertiary), RIOT FIDO #14 EOD predictably, ARTW C&B possible, minC and Typ3 reached during day, ditto for ORPN though ORPN did a vicious squeeze first, woulda had to be secondary entries .. XNET another old BTC play back to life, IB has 2.5MM shares so I’ll stay away :) … good day, very solid trading, coulda been very big if not under PDT, money will be sent this week or next (he says hopefully). Still have two old positions (PYX, DBD) yet to stop out but looks like they will … once those are clear, I can switch 100% to bookie broker.

Movies Watched -- Molly's Game (2018)

Added on by C. Maoxian.

140 minutes long so at least 40 minutes too long… way, way, way too long. Written and directed by Aaron Sorkin, a sympathetic view of Molly Bloom, a woman who ran an underground poker game for a number of years, first in LA and then in NYC. Starred Jessica Chestain, er, Chastain and her chest and cheekbones, and Kevin Costner as her pushy Jewish dad, Larry, which didn’t work for me. They also invented a gorgeous black lawyer (Idris Elba) who worked pro bono for her, which was weird but par for the course for Hollywood.

Only really interesting part was when the Italian mob beat her up after she rejected their offer of debt collection and protection. Could she really have been that naive? Also interesting was how she recruited players by paying off casino floor men and cocktail hostesses. Some cheap psychobabble about Daddy Issues and needing to have power over powerful men. Why not just say she was greedy, liked partying, and didn’t have the good sense to quit while she was ahead?

I think Sorkin likes these Wayward Jew stories and wants to create his own version of history. Wouldn’t have been terrible if they made it 90 minutes long, but as it is, it’s a red, avoid.

Mick Lasalle gets it right: “Sorkin takes a sordid, morally muddled anecdote and inflates it with an importance it doesn’t deserve and can’t sustain … Sorkin’s default, when in doubt, is to steamroll the audience with dialogue.“

Just a really ambitious librarian who liked snorting coke

Just a really ambitious librarian who liked snorting coke

Notes for Chat with Traders, Episode 171

Added on by C. Maoxian.

Episode 171 -- Stan Gluzman (77:46)

  • Doesn't trade the close anymore

  • The close used to be his go-to time, but not anymore

  • Doesn't hold overnight

  • Biggest position on by 9:45 AM, trades around core until 11 AM, usually flat by noon

  • Things are mispriced in the morning, but fairly priced by noon

  • Forgets tickers shortly after he's done trading them

  • Aaron mentions Stan's CLRO trade from morning of recording

  • Looks at VWAP

  • Tries to short near top, covers half on washout, re-shorts the next pop, covers wash, etc.

  • All chat rooms watch the same stock, pump it multiple times throughout the day

  • Trading full-time 4.5 years, another 1.5 years part-time before then while in college

  • Started in 2013 when in college, made 30% on a $5 stock in two days, "bitten by the bug"

  • Started studying trading on his own while still in college, joined chat rooms, bought DVDs

  • Locked himself in his room and "started blowing up accounts" in 2014

  • Realized he needed to be surrounded by professionals, joined prop firm in 2015

  • Was a breakeven trader when he joined the prop firm, before accounting for commissions

  • Undercapitalized, so commissions made him a net loser despite breaking even on trades

  • At prop firm he first learned how to scalp for half a penny trading millions of shares

  • Read on a forum that a good prop firm doesn't take your money, no capital contribution

  • Seven Points Capital office right next to his college

  • Seven Points doesn't require capital contribution, charges no commissions

  • Seven Points wanted people who were teachable and passionate about trading

  • Advantage of being prop trader versus retail trader: "like working out in a high-end gym with a personal trainer versus working out in your backyard with buckets of water"

  • In prop you're trading other people's money, not your own, so no psychological pressure

  • Routes are important, has access to ten dark pools, six aggregators, plus all the exchanges

  • Have to figure out how to jump the queue by figuring out which dark pool is actually buying or selling

  • Has 150 (?!?) hot keys set up

  • Most used hot key, "F2" short the bid [I laughed]

  • Uses scroll wheel to select position size

  • Mike Katz was his first real mentor

  • Mike Katz always keeps his eyes open, in the right places at the right times, on his toes

  • Red two days in a row? Try to figure out the error

  • When losing money, he sizes down, divides his daily lockout dollar loss by four

  • Got his first paycheck five months in at Seven Points Capital, been sizing up ever since

  • 2015 his first full profitable year

  • In 2016 he traded 260,000,000 shares, more than a million shares a day scalping [no commissions key?]

  • First time he lost $1,000 was a shock, but as he sized up, it became a regular sized hit, no longer hurt

  • In 2016 he would take advantage of inefficient algorithms, "short the offer, cover the mid"

  • In 2016, Sprint (S), Sirius (SIRI), Ford (F) were ticker symbols he'd trade: high volume, small range

  • Short the offer, saw offer was about to lift, would cover the offer or cover at the bid once it flipped up

  • 96% success rate doing the kind of scalping, but that was 2016, can't do this anymore

  • Can gauge "Book Pressure" by watching the tape

  • Algos didn't care about book pressure, it would just execute at some regular interval

  • Could spot the algo because the same price and quantity was printing at a regular interval

  • Midpoint is price between bid and offer, there is "invisible" liquidity there, "peg to midpoint"

  • BYX is his preferred route for the midpoint

  • "Can't get the bid, go for the mid"

  • Crappy little penny stocks are volatile and retail-driven, small order sizes, not scalpable with size

  • Switched from scalping stocks like Sprint to scalping SSR (short sale restriction) stocks

  • Using his superior routing skills, he could short SSR stocks at the mid as they fell

  • Most people are at the offer or the bid, they don't even know about the mid

  • Gives example from his SSR trading that day: one gain was five cents, other gain was 35 cents -- "scalpy"

  • SSR strategy just a tool in his toolbox now, the edge has sort of disappeared

  • Small-cap stocks gap up and fail, a "fader" [no mention of locate fees, alas]

  • Small caps are volatile, full of dumb money: newbies plus true believers

  • Also trades big cap stocks on earnings days

  • Small cap stocks gap up for a lot of reasons, usually a press release

  • Uses gap scanner, filters by float and market cap, less than 100 million share float, usually under 20 million

  • Uses multiple entries and multiple exits ... this is the secret to his success

  • Takes 1/4 position at point he thinks is the top, if wrong he just loses 1/4; if he's right, he adds as it falls

  • Scalps half his position and holds half for the all day fade

  • If he thinks he's right, and a big bid appears, he'll smash the bid

  • You'll never pick the top or the bottom, you always have to scale in and out

  • Give yourself room to be right

  • If stock drops sharply, will take off a quarter, drops sharply again, will take off another quarter

  • After every sharp drop he covers, then re-shorts the bounce if it happens

  • Has a set risk amount on every trade that he's willing to lose

  • When he doesn't follow that set risk amount, "gets stubborn," he takes his biggest losses

  • "Do you want to make money, or do you want to be right?"

  • Tracks performance of his setups: size of float, size of gap, time of topping out, pre-market volume, etc.

  • Has created "money box" ranges where he expects stocks to top out or bottom out

  • Visualizes the "money box" on his charts

  • Learned how to code to create the "money box" visual indicator on his charts

  • Stocks that continue to squeeze up are outliers

  • Tries to line up fundamental reasons, tape reading, basic technical analysis, on every position

  • Learned about volume forecasting from AllDayFaders

  • Idea is to forecast volume to predict if price will fade or squeeze during the day

  • Unusual demand leads to squeezes

  • Stan doesn't want to get a job, so he trades for a living [chuckling]

  • June 2018 he had a red month, it was rough, he pulled a lot of all-nighters

  • Learned a ton from JTrader, who helped him get through June slump

  • Mike Mangieri encouraged him, had his back despite the losses

  • NYC is expensive and the weather isn't great, so he left for Florida (also taxes too high in NY)

  • Set up Ft. Lauderdale office with Krishna Joshi

  • Has three other traders on the desk in Ft. Lauderdale, plus one studying for his license

  • New traders shadow him for a couple of weeks, can figure things out more quickly that way

  • Records his screen every day, posts it to group intranet so colleagues can study

  • Eliminate mistakes, don't repeat the same mistakes

  • Being fearful when entering a trade is a mistake to be worked on

  • Sized up in 2018 and wasn't as consistent as 2017

  • Goal for 2019 is to find balance between taking full-size positions and not shooting for home runs (holding too long)

  • Added many new setups to his toolbox in 2018

  • "If the market changes, I will adapt."

  • Twitter: @ciocanatrader

Trading Notes -- 20190215 Friday

Added on by C. Maoxian.

SAEX, SKYS, APHA, SOLO, DUV, CYBR, ARRY, DBD, PYX … poz broad tone, can’t have down day anymore, not allowed, comments in charts below:

Trading Notes -- 20190214 Thursday

Added on by C. Maoxian.

Mixed broad tone …HTBs du jour: SOLO (again), RBZ, FUV (latecomer) … scratched a number of marginal things, put on full risk in CYBR (all-time high), no way to reduce risk given time of day. See charts below:

Trading Notes -- 20190213 Wednesday

Added on by C. Maoxian.

Poz broad tone … noticed that since Dec there’s never been three consec down days and rarely two, massive uptrend means no tailwind … SOLO the HTB SDJ today … 88,888 trades at day end … PTX the other HTB SDJ … I shorted SOLO (0.02 borrow) in the morning at C&B avoided adding A (fortunately, partly because I didn’t want to pay for yet another borrow) and stopped out for a 1R loss, well played … then they ripped it to 3 no 4 no (after hours) 5 and maybe 6 as I type this … you gotta honor thy stop … recall that I lost a VAST amount of money recently in APHA from what? not honoring my stop, then my head was screwed up so I couldn’t take advantage of it as it fell and I surely would have made it all back and then some … a loss like COTY yday, that’s a fluke, that doesn’t count, I honored thy stop as best I could, no regrets (helped that it was very small size lol) … covered the rest of APHA Typ3, there’s an example of a fine trade which made back most (all?) of my squeeze out loss earlier, my head was still in the right place with that one… some of the late day things I put on yday I scratched, just a waste of time (and commish) .. covered some PTI at an adjusted minC, will scratch the rest if it bounces, it’s dead 3980 trades today … shorted PYX messed up by not getting an add at B but I was busy and there were a million things in play today, at least I got the main size on … shorted YGYI covered minC waiting below with rest … tried to short GSUM, no spot but free borrow made me look hard at it … shorted RKDA, DBD, will see what happens, may end up scratching or taking a loss, who knows.

The Spoiled Children of Liberty

Added on by C. Maoxian.

Liked this bit from an interview with Midge Decter in October 2001:

I think we're living as people have never lived before. Never. And we don't know our way. We don't know how to do this. We don't know how to live into our 90s. We don't know how to live without physical suffering. We don't know how to accept hardship, and when it comes, it feels like an injustice. The things that people lived with always throughout history, we--we find ourselves cut off from the sources of human wisdom and experience because this life is so new and we are bewildered. I think we are.

Trading Notes -- 20190212 Tuesday

Added on by C. Maoxian.

Snow day, kids home, poz broad tape, COTY tender whammy, not a small cap after all, PYX VKTX TROX CVNA CHGG WORX (0.05 borrow) MIME … lotta earnings, still waiting below in AMRS ARRY PTI … VKTX good and bad

Trading Notes -- 20190211 Monday

Added on by C. Maoxian.

May write more later … AVCO SPI PTI OTLK AMRS

Techniques Employed by Manipulative Short Sellers

Added on by C. Maoxian.

Found this comical section among the Risk Factors in some Chinese company’s filings:

Techniques employed by manipulative short sellers in Chinese small-cap stocks may drive down the market price of our common stock.

 

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from the difference in the sale price of the borrowed securities and the purchase price of the replacement shares. As it is therefore in the short seller’s best interests for the price of the stock to decline, there have been incidents of short sellers publishing, or arranging to publish negative opinions in order to create negative market momentum. While traditionally these disclosed shorts have been limited in their ability to access mainstream business media or to otherwise create negative market rumors, the rise of the Internet and technological advancements regarding document creation, videotaping and publication by weblog (“blogging”) have allowed many disclosed shorts to publicly attack a company’s credibility, strategy and veracity by means of so-called research reports that mimic the type of investment analysis performed by large Wall Street firms and independent research analysts. These short attacks have, in the past, resulted in the selling of shares in the market, on occasion on a large scale and broad base. Issuers with business operations based in the PRC, that have limited trading volumes and that are susceptible to higher volatility levels than U.S. domestic large-cap stocks can be particularly vulnerable to such short attacks.

These short seller publications are not regulated by any governmental, self-regulatory organization or other official authority in the U.S., are not subject to the certification requirements imposed by the SEC in Regulation Analyst Certification and, accordingly, the opinions they express may be based on distortion of the actual facts or, in some cases, fabrication of the facts. In light of the limited risks involved in publishing such information, and the enormous profit that can be made from running just one successful short attack, unless the short sellers become subject to significant penalties, it is more likely than not that disclosed shorts will continue to issue such reports.

 

While we intend to strongly defend our public filings against any such short seller attacks, oftentimes we are constrained, either by principles of freedom of speech, applicable state law (often called Anti-SLAPP statutes), or issues of commercial confidentiality, in the manner in which we can proceed against the relevant short seller. You should be aware that in light of the relative freedom to operate that such persons enjoy – oftentimes blogging from outside the U.S. with little or no assets or identity requirements – should we be targeted for such an attack and the rumors not dismissed by market participants, our stock will likely suffer from a temporary, or possibly long term, decline in market price.

Market Value of Publicly Held Shares

Added on by C. Maoxian.

If you’re a small cap short seller, this is one of the key things you have to understand:

(D) Market Value of Publicly Held Shares

A failure to meet the continued listing requirement for Market Value of Publicly Held Shares shall be determined to exist only if the deficiency continues for a period of 30 consecutive business days. Upon such failure, the Company shall be notified promptly and shall have a period of 180 calendar days from such notification to achieve compliance. Compliance can be achieved by meeting the applicable standard for a minimum of 10 consecutive business days during the 180 day compliance period , unless Staff exercises its discretion to extend this 10 day period as discussed in Rule 5810(c)(3)(F).

Here’s Nasdaq’s Continued Listing Guide (pdf) from January 2019. The market value standard is currently $15 million. Once you know the size of the company’s common share float, you can quickly figure out what price “they” are trying to maintain for 10 consecutive days. Then you act accordingly.

Movies Watched -- Revenge (2018)

Added on by C. Maoxian.

108 minute running time. Some French language. Rape-revenge movie, ultra-violent and gory, buckets of blood, not leavened by enough humor, fairly low budget, girl in bikini toting heavy weaponry, this appeals to teenage boys, I guess … you know, sex and violence and “revenge” without any subtlety … no idea why it’s 92% fresh at RottenTomatoes, the rating system there is next to useless… avoid it, unless you’re a certain kind of teenage boy.

Lena Wilson correctly writes: “… though the film makes a valiant effort to subvert a sexist formula by shrouding itself in French art film trappings and pseudo-empowering femininity, it ultimately falls prey to its exploitative roots … the film sets itself up for feminist failure by buying into the violent rape-revenge premise at all.”

Tomb Raider Jen

Tomb Raider Jen

Movies Watched -- Beast (2018)

Added on by C. Maoxian.

107 minute running time and I could have cut out seven minutes to make the sacred 100 minute mark, but it wasn’t overly long, which is the case with nearly every movie made today. I liked this one, even though it’s a W.D. By movie (written and directed by the same guy).

It’s a sort of horror / thriller / mystery. Mental illness, stifling family relations (Mommie Dearest), island life (Jersey) … I liked the class angle (as always) … lead actress was good, really good, amazing red hair, I think she’s Irish, reminds me of Sally Hawkins … movie has a strange vibe which is kind of wonderful, thanks in part to the cinematographer.

It’s not a great movie, but it’s unusual and good enough to get a recommendation from me. Green light, go.

You need help.

You need help.

Trading Notes -- 20190208 Friday

Added on by C. Maoxian.

Weird mixed tone with eod spike (see chart below) … brief notes … quiet Friday … lowered stop on AMRS and they jammed me out which was of course a perfect spot to add, so I instantly re-shorted (revenge trading much?) but I still think I’m right and this was so low-volume shenanigan BS, dummy de-Gentile revealed his big short so now they have to drive him (and me) out … SNNA the only HTB play, miraculously IB got me some shares but not even enough for a full fill on ONE leg, annoying and messes up the whole thing, thank god it worked otherwise I really woulda been annoyed … used bookie broker (0.0369) to short some more but again couldn’t leg in due to PDT, dumb, must get money over there but I’m worried about the bookies booking back to Bermuda or wherever :-) But SNNA a beauty entered C, got no adds (see above) but got lovely minC Typ3 exits for a solid win… if you were playing the morning “flag” breakout you surely woulda been trapped and crushed a real disaster but that never happens to anyone at least on TWTR, ya know… COTY an earnings play and I was a little smartassy shorting the PO B level or at least I think that’s what I was doing, didn’t wait for C which I think is a rule, innit?, but of course it went against me and I was good about not adding in the PM (for once!), will be a small loss if I don’t pull the stop which I very well might since I’m a sicko… ARRY not getting to minC and I wish it would before ToS gives me another margin call in my rapidly diminishing $4K account, lol … HYRE was a yday HTB SDJ and today it did under a thousand trades EOD talk about being StuckAtaProfit don’t worry no one holds overnight with the 7x fee sheesh. BIOC did an offering PO those dirty bastards, I recall shorting $3 just the other day and now it’s $1, but again, 7x ON holding cost. Usually I lose money on Fridays, often lots, but SNNA saved me today (bookie broker borrow the key there).

Lost and Lonely

Added on by C. Maoxian.

I dig this cover of what is probably The Cure’s best song. The bassist’s primal roar made me laugh out loud.

Americanization

Added on by C. Maoxian.

From this interview with Barbara Crossette:

“… but what is Americanization? You know, I'd say to people--they'd say, `Well, you know, Coca-Cola, you know, rock,' whatever. It--you know, it's not. It's--it is, but it isn't. And some of these things are--come from--it's human rights, it's the rule of law, it's the fact that the education system--we run it down all the time, but basically it works. Why do so many people want to come here? Because they know that when they come--if September comes around, the school's open and the children go to school, you turn the tap and the water comes out, electricity works, that the police have problems, but that there is a police force that, if your house is burglarized, you don't have to go down to the police station and bargain for how much money you have to pay for them even to register the case, people don't steal the stamps off your envelopes--I mean, the sense of civil society that works.”

I spent ten straight years in China, which made my love for America, and everything it stands for, that much stronger.

I also liked this line from her Singaporean friend, which is a folky version of 仓廪实而知礼节:

“When the tummy gets full, the mind gets hungry.”

Trading Notes -- 20190207 Thursday

Added on by C. Maoxian.

Broad tone neg, first trend day down in ages … I got a margin call in my $4000 ToS account on the ARRY as they gapped it against me, that was a surprise, never seen such a thing, it must suck to be a little guy, any kind of day trading just impossible if you’re short stacked, no wonder the kids go to the sleazy offshore bookie brokers, they don’t have a choice … anyway stopped out of ARRY and re-shorted it immediately in both ToS and IB. AMRS looked weak so I did the Smashian in the money add and it instantly went against me. Added more off today’s OR, but they drove me out. Made a sorta mistake not tightening stop on it, but did end up taking 1R loss (on one leg only, coulda and shoulda been three legs given morning action but I was confused by in the money add and old posish so thankfully took a smaller loss than I should have) on today’s trade … the larger AMRS play still underway, even added some more at C which was only semi-wise? Covered some MGNX at D since the range is so crazy there, I’ll be happy to be all out at minC, fingers crossed it’s way down there… two decent HTB plays this morning HYRE and ATOS (see below), I played neither, PULM a latecomer and instantly failed, I never woulda been quick enough, BIOC also briefly in play, I didn’t take the borrow, LCI earnings thought I’d get a play but they slammed it so hard during OR it was finished.