The great Glen Campbell … had to be recorded in snippets because of the Alzheimer's … R.I.P.
Stock Du Jour, Wed. Apr. 8, 2020, MBRX
Moleculin Biotech Inc was the stock du jour … MBRX did 264,000 trades by end of day … it was hard to borrow and I paid 1.9 cents per share for the borrow ($190 per 10,000 shares) … I had an average of $1.468 on my short and covered at an average of $1.249. Gross day trading gains of around 15% are very pleasing, but of course there are losses and fees every day. Still a tough way to make an easy buck.
After my daughter started Kindergarten and I was able to resume day trading in February 2017, I bemoaned the lack of borrowable shares in microcap stocks at Interactive Brokers — for two long years! — before finally sending some money to a specialty broker who could locate hard to borrow securities for me. Hundreds and hundreds of opportunities missed, but that’s what happens when you’re stubborn and sort of simple-minded, like me. Water under the bridge, I guess.
Remember to slow down the footage using the YouTube player and pause, rewind, and study crucial points during the day. Bookmap provides a unique view of the book, infinitely better than staring at the Level 2 and time and sales, a.k.a., “the tape.” Enjoy!
Stock Du Jour, Tue. Apr. 7, 2020, AKER
There were three stocks du jour, all hard to borrow, but I thought I’d focus on Akers Biosciences Inc again since they did a midday stock offering and those are always interesting to view in the Bookmap. I paid between 8.93 and 10.35 cents per share for the borrow (ave. $964 per 10,000 shares) … I shorted at $7.93 ave. and had an all-out cover of $5.718 ($5.50 best), which was good. AKER did 122,000 trades today.
The other stocks du jour were DPW (127,000 trades) and YGYI (87,200 trades) … I traded both of them with less success, bungling the trade management on both really … I expected them both to fall much farther than they did, and I wasn’t vigilant about managing the balance of my positions after the initial covers (overconfident?), and got jammed out on both of them — scratches when they should have been decent gains, if well managed.
I’ve slowed down the tape right around the offering so you can take a hard look at how disastrous a midday offering is for those trapped long from above.
Giving Away the Golden Goose
From Kris Velma’s recent blog post:
“… for me, I want to avoid volume at all costs. Anything with over 10 million shares traded, or projected shares traded that day, I avoid completely … The stocks I target are ones traded by chat room members, and none of them are holding long term on these tickers. Once momentum shifts, they will all panic sell and the stock drops off a cliff, then I cover. Scaling your size on these tickers is limited since there is only so much liquidity you can get into them without seriously affecting the price action or trapping yourself into a position if you need to market out, which is why I usually cap my positions to $20,000 to $30,000 dollar value. Still plenty of money to be made when you can make 20-30% routinely on these pump and dumps.“
Update: Kris Velma continues to share his trades … these were his executions on April 8, 2020:
As he said above, these were all parabolic moves, but on very low volume (AKER was relatively high volume, but still “low”) … note his position sizing. He is keeping his position size very consistent, around the $30,000-$35,000 range. He’s no doubt using a percentage of his total account, which has grown hugely of late, so what used to be $20,000 to $30,000 positions are now $30,000 - $35,000. His losses will always be proportional to his gains, it looks like, i.e., these are 1:1 risk reward trades, but he’s expecting a very high win rate. He might be using some fixed percentage for his gains, the exits are a bit of a mystery to me .. he might be better off just carrying things into the close, but that may be too psychologically difficult with these microcap hard-to-borrows.
Stock Du Jour, Mon. Apr. 6, 2020, AKER
Akers Biosciences Inc was the stock du jour … AKER did 195,000 trades today. … hard to borrow … I paid between 5.49 and 7.8 cents per share for the borrow (ave. $665 per 10,000 shares) … I was a good boy and didn’t short it prematurely…. waited for 14:35 kill candle and shorted $5.05 ave. There was a really slimy fakeout breakout at 15:34, they did not pick me off but came close, cleaned out both sides of the book beautifully, slow it down and pause to study the Bookmap then. The clock was running out and I covered most at $4.50 into the close and the rest after hours at $4.25 best.
Blows Up Account in CODX
Q: What was your exit plan?
A: I didn't really have one.
I’d like to hear more details about the exact entries and exact exit, preferably with time stamps … he says he was short from an average in the high $3s (initiated on 2/25/20?) and that he added to the trade once it went against him (how much? at what prices? which dates?), and that his broker (EGRP) bought him in in the high $10s (he had no stop loss order in the market) … he had 16,000 shares and lost around $100,000.
Clearly he went on tilt, and doesn’t have a clear plan or method. He wasn’t using a hard stop. He wasn’t sizing his position to his expected loss. Basically he broke every rule in the book, and paid the price (busted out).
He said he was making an average of $1,200 a day prior to this (trading from his cellphone while at day job) … did he have stops in any of those trades? Were they mainly longs or shorts? I’d ask a hundred different questions.
Click to enlarge
Movies Watched -- Hail, Caesar! (2016)
106 minute running time … more smart-assery from the Coen brothers. Making fun of 50’s Hollywood and the studio system, but this isn’t one of their better works, more like inside baseball and a full employment act picture for their buddies. “Not their first dud comedy” is right. Give it a miss.
Wanna lace up what you have on “Hail, Caesar”?
Stock Du Jour, Fri. Apr. 3, 2020, CEI
Camber Energy Inc was the stock du jour … hard to borrow, I paid between 2.88 and 3.78 cents per share (around $333 per 10,000 shares) … CEI did 144,000 trades today Again, it came on my radar a little bit late, but in plenty of time to be tricked and trapped several times before 10AM.
Movies Watched -- The Snake Pit (1948)
108 minute running time … I went to 4x fast forward after a full half hour of normal speed and don’t regret it … a mental illness picture from the 1940s … interesting to see the shock treatments and ice baths … Olivia De Havilland was treated better than the other inmates because she was better looking and listened to Brahms. It was probably an impressive picture for its day, but I couldn’t get into it and don’t recommend it, though John Farr does. You can’t win ‘em all, even when you have Farr screening them for you.
Starring Sigmund Staring
Stock Du Jour, Thu. Apr. 2, 2020, APOP
Cellect Biotechnology Ltd was the stock du jour … hard-to-borrow, I paid 2.16 cents per share ($216 per 10,000 shares) … it did 112,000 trades today with about 12,000 of those being mine (half kidding). I didn’t notice APOP immediately, so the data begins around 9:38 AM.