Stock Du Jour, Fri. Apr. 24, 2020, MESO

Mesoblast limited (MESO) was the HTB (hard-to-borrow) du jour, doing 118,000 trades and $458MM in volume … I paid between 4.33 and 29.2 (!) per share for the borrow (a weighted average of nearly 19 cents or $1,900 per 10,000 shares) … I did something really stupid and shorted it around 7:30 AM at an “experimental” entry with too big a position and it ran to $20.57 at the open, nearly $10 above my initial entry … so I had dug myself another “unrealized” hole again — a stupid, unforced error. I wasn’t feeling tilted at all though, thank god, and was able to minimize the damage by end of day, but you’ll see in the summary that I still took a decent loss. Fortunately I had some other profitable trades to make it sort of a breakeven day, NOT including borrow fees.

MDGS was the other obvious HTB du jour (116,000 trades, $58.4MM dollar volume) and I wanted to play it, but the bookie had no shares when I needed them … needless to say that it broke perfectly and faded all day, which would have been a huge win, but I wasn’t in it. See how it works in the real world?

MBOT was a latecomer and IB did have some shares, but it “reclaimed,” “flagged,” and ran in the afternoon, jamming me out for a 1R loss. That wasn’t an unforced error like MESO, so I don’t mind taking that loss. Of course I shoulda reversed and gotten long, but no, I’m incapable of doing that.

I always hate ending the week on a loss, or even breakeven, but that’s the way it works in reality … I’m not #twading here.

Movies Watched -- Shoot to Kill (1988)

109 minute running time but I went to fast forward after 15 minutes … low budget, bad music, dumb story, bad acting, horrible late 80s vibe, just crap … a Twitterer from Germany recommended this because he said he imagined that’s what it looks like where I live, but I don’t live in British Columbia. Sidney Poitier must have been really hard up for money to have agreed to do this. Black city slicker in the wilds still played for laughs in 1988? Terrible.

I ain't taking no tenderfoot trails.

Stock Du Jour, Thu. Apr. 23, 2020, CPAH

CounterPath Corp (CPAH) was the HTB (hard-to-borrow) du jour, doing 61,800 trades and $53.6MM in volume. The borrow was somewhat erratic, but I was eventually able to borrow what I wanted at 5.33 cents per share ($533 per 10,000). It gave me a good spot and this was an “all day fader” with near constant selling as you’ll see in the video below.

Whiting Petroleum Corp (WLL) is also hard-to-borrow now (in the old days, IB had unlimited shares of this one) and the borrow cost was 1.99 cents per share, about as cheap as it gets. It did 423,000 trades and I did trade it with mixed results (this means I lost money, but not much, lol).

Inovio Pharmaceuticals Inc (INO) is easy-to-borrow (ETB) and is a major pain in the ass as a result. I dug myself an enormous hole in the morning as I got it repeatedly wrong, shorting the low tick and covering the top tick, over and over (look at the wicks above 13.35, that’s ALL me buying there). Fortunately I didn’t go completely on tilt, and when it finally broke I was able to catch it with enough size to undo all the morning mess. When something is coiling and you’re just out of sync with it, losses can add up really fast.

There’s a reason you’re only as good as your last trade … you can easily go out of control with a single trade and lose everything and then some: wife and kids, pickup truck, dog, Zippo collection, you name it.

Stock Du Jour, Wed. Apr. 22, 2020, SAEX

SAExploration Holdings Inc (SAEX) was the stock du jour, doing 88,200 trades and $58MM in volume … it was very hard to borrow and I only got a partial fill at the bargain (!) price of 15.05 cents per share. I got a good fill on entry though and was a pretty good boy about not covering anything prematurely, but I still did of course, though very litte… still working on solving this problem.

The same difficulty and expense of borrowing was true of the other HTB du jour, PECK, which did 41,500 trades ($52.9MM in volume) … I paid 11.88 cents per share for that one and ended up getting jammed out shortly after it ran above $6 at end of day (5.748 in, 5.914 out + fairly massive borrow expense, argh) … of course it went to $5.25 after hours and I would have made decent money there, but I was feeling a bit tilted, always happens after a cynical stop run. Shoulda re-entered, story of my life. Trading is simple, but it ain’t easy, as any service seller will tell you.

Taking a Closer Look

Kris Velma, whom I wrote about earlier, continues to reveal a lot about his day trades on Twitter. I was interested in this play in BRQS … let’s take a closer look. He shorted 6,546 shares at a $4.984 average (position size: $32,625.26) and covered 6,546 shares at a $4.495 average, which gives a gross gain of $3,201.87. I don’t know what his borrow fees were exactly, but let’s say they were $200-$300.

As you can see from the chart below, the maximum unrealized loss he sat through was $18,760.84, so he was risking at least five times his eventual reward. Is this a trading style you want to emulate? I’m not sure what his strategy is for stopping out of positions, but “maximum adverse excursion” is one stat you should pay attention to.

View fullsize

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Stock Du Jour, Tue. Apr. 21, 2020, WATT

Energous Corp (WATT) was the stock du jour, more specifically the hard-to-borrow or HTB du jour, doing 311,000 trades and $327MM in volume. I paid between 2.19 and 2.73 cents per share for the borrow (just under $250 per 10,000 shares). VXRT was another in-play stock but it was ETB (easy-to-borrow) and required a much more careful approach. Remember that being able to locate hard-to-borrow securities is in itself a huge edge because most retail brokerage customers are unable to short HTBs even if they wanted to … generally speaking, retail traders don’t short stocks, and even if they wanted to, they couldn’t through the mainstream oligopoly brokers: Fidelity, Schwab, TDAmeritrade, E*Trade, or Interactive Brokers.

I’m trying to break the bad habit of covering in pieces periodically as something falls in my favor. All the exhaustive backtesting shows that holding till end of day is the way to go, but I’m almost always uncomfortable doing this, even with the modest size that I trade. It’s something to work on anyway, but today was a good day.

Movies Watched -- His Girl Friday (1940)

92 minute running time … I went to fast forward after 10 minutes … late 1930s comedy based on a stage play, I wasn’t in the mood for it… snappy fast dialogue. John Farr liked it, of course (Cary Grant is in it), but I say you can give it a miss.

A lot of daffy buttinskis running around without a nickel in their pockets and for what?

Stock Du Jour, Mon. Apr. 20, 2020, EROS

Eros International plc (EROS) was the stock du jour, doing 118,000 trades. It was a super busy day in hard-to-borrow land … I traded eight tickers (BCRX, CYCC, CODX, EROS, INO, NBY, SGRY, VBIV), which is unusual for me — all green, bro, green is green. Now I can fill out my menstruation calendar with no red days, brah.

I paid the bookie 2.25 cents per share ($225 per 10,000) and then two minutes later IB got half a million shares in inventory — argh! IB actually had availability for five of the eight tickers, so that was nice. Paying large amounts of money upfront for a borrow is something only semi-professional gamblers can do … if you’re a small guy still learning the short side, you’ll get eaten alive by the fees.

Stock Du Jour, Fri. Apr. 17, 2020, AMC

I’m choosing AMC Entertainment Holdings Inc as the HTB (hard-to-borrow) du jour even though GENE was more actively traded … AMC did 67,600 trades by end of day and the borrow cost was 2.06 cents ($206 per 10,000). If you didn’t catch the break right at the open, it woudn’t been much of a play, though you wouldn’t have lost anything in it, even with a late entry. Pretty quiet in HTB land on this Friday. SGRY was a latecomer and ETB, so not one to fight. DNJR was another one that was active, but very tricky as it was also ETB (easy-to-borrow). Until next week….

Movies Watched -- This Gun for Hire (1942)

81 minute running time … young Alan Ladd (not blonde) and the lovely Veronica Lake (yes blonde) … the story isn’t very good though … this is a John Farr recommendation, but I think you can give it a miss. Trying to rouse some patriotism from the psychopathic killer in 1942. Not on my Top 500 list.

She used to beat me. To whip the bad blood out of me, she said.