Project Elijah: MTB

Well, the contest ended a little sooner than I would have liked. Wednesday’s huge Rally of the Finanacials blew past the Stop-Loss that I had placed to ensure the profits of the options. This sometimes happens, the Stock price triggers your stop-loss but by the time that your trade is done, it’s worth something different than your Stop-Loss.

This is what happened here. So, let’s take a peak at what happened and what Elijah gets as a results, shall we. WARNING: There will be Charts and Numbers, if these scare you, please hold the hand of the person next to you and keep your arms and legs in the ride at all time. Thank You, The Management.

On July 8th, I bought 3 Put Options for the Stock MTB, which is the M&T Bank. Don’t know anything about and really don’t care. This was not an investment for me, so pouring over the Fundamentals of the company wasn’t a priority… I just knew that Financial Companies like the banks sucked and this was a bank. So I got in.

Since the Stock Market is out to screw every investor, personally, this trade went horribly against me in the first couple of days. Like, my trade had lost 50% of it’s value. Now, instead of panicing, I knew that I needed to be patient. So I went to hospital to have ice water infused in my veins. Okay, that didn’t “really” happen, but I tried to stay Patient.

Monday Morning, My trade positions STUNK. I was at a $800 loss in the first hour of trading and I had a meeting to go to and so I couldn’t watch my trade die a slow and horrible death. It just so happened that our meeting was at our Financial Planner’s and so there was a big screen TV that I could see… however NONE of my trades were on the streaming ticker. But the Dow Jones just kept going lower and lower all day long.

During the meeting, MTB flashed up on the screen and it was 9 points down. I knew that was good! Just didn’t know how good.

When I got back to my desk and checked my trade, my MTB position was UP $2,000 overall! It had recovered the previous days’ losses and gained. This is one of the reasons why I chose this particular trade. It was already a winner, with the potential to move more.

As we know from the Sidebar, the Option was worth around $945 at one point and I could have cashed it in there. But I wasnt’ going to cut my winners short. I did want Elijah to get some cash though, so I set a Stop-Loss for $8. Meaning, when the Option price hit $8, an order to SELL would be initiated. It’s a safety gaurd but not full proof. Wednesday was a HUGE rally day for the Banks. If you were a day-trader, you were making money left and right on the movement of the banks… it was UP, UP and UP!

MTB Tracking

So, the price of the option hit $8… and it kept going. It didn’t sell until it was $6.80.

So, in 8 days… this one option worked its way around to end up earning 79%. Funny that I earned that OFF of a bank, even though interest rates IN the banks are so painfully small. I’d laugh to see what the 8days/79% would be annualized.

So what does Elijah get? He gets $300… and I get to give it to him from doing nothing other than letting my money work for me. I just wish the contest could have lasted longer. I did actually think about getting back into the trade on Friday (7-18) but the spread on the option (this affects my profit) was ridiculous. So, I’ll make my donation some time this week when I can transfer the money.

About planet3rry

I'm a husband, father and runner in the Knoxville area. I love the way that running makes me feel and how it has changed my thinking. I am always looking for the new PR whether in the 5k or the marathon