I Clicked The Wrong Button When Trading And It Cost Me USD250

On 30 March 22, I closed my Tesla PUT contract (Strike Price USD980, Expiry Date 29 April 22) and locked in a profit of USD150. The contract was just opened one day earlier on 29 March 22.

I usually roll my contract manually as I want to have better control over the closing premium price of the existing contract and opening premium price of the new contract. So, after manually closing the SP980 PUT contract, I decided to sell another PUT on Tesla at the strike price of USD990, with the same expiry date. The range of premiums was from USD3,000 to USD3,200.

I would usually start my bid at the highest possible price of USD3,200 before adjusting downwards until the contract gets assigned. However, in this round, I was assigned immediately when I confirmed my bid price of USD3,200, which was quite strange as people usually don’t buy at the highest asking price.

I then went to look at my buying power and realized a bulk of the money that was set aside for the cash-secured PUT contract was still available. I checked my trades again and was shocked to realize that instead of selling a PUT contract (SP990, expiry 29 April), I actually bought a PUT contract instead.

I then tried to quickly sell the PUT to close the contract but was unable to do so as the share price of Tesla was rising. I eventually sold the PUT contract at USD2950, which was a loss of USD250, as I paid USD3,200 for the PUT contract just minutes earlier.

An options trader often buys a PUT contract to hedge against a downtrend. The agreed strike price is the price the buyer of the option contract can sell if the share price falls below the strike price on the expiration date. If the share price falls to $0 on the expiration date, the buyer of the PUT contract can still sell at the agreed strike price.

See how a PUT option works here (explained in layman’s terms):
How does PUT Option Works?

Therefore, when the share price keeps falling after the PUT contract was purchased, the premium of the contract will keep increasing and the buyer can then sell away the PUT contract at a profit.

In my case, the opposite happened and the share price actually went up after I bought the PUT contract, so the premium of the contract dropped and I had to sell at a lower premium to close the contract.

Concluding Thoughts

I share this experience so that you can take reference and be more careful when you trade in the future. You may have accidentally pressed the wrong button (buy become sell or sell become buy) and incur a loss for nothing. So, always check your trades before confirming the order or you may have to pay a price to reverse it. Don’t trade when you are too tired (especially the US stock market opens in a different timezone as where you are in) as you may be prone to error when you are sleepy or tired. I hope you find the sharing useful.

<< Subscribe to my blog to have all these articles delivered directly to your email address >>

*** FREE MONEY ***

Sign up for WeBull Securities Brokerage and fund any amount to receive up to USD500 in share value (Apple, Tesla, Microsoft, Google)
Receive Free Money (USD30~USD500) When You Sign Up With WeBull Securities Platform (Fund ANY Amount)

*** FREE RESOURCES ***
Keen to learn about options trading but do not wish to pay for expensive courses, this newbie guide will help gain the knowledge and fundamentals to understand options better. And it’s totally free!
The Newbie’s Guide To Options Trading

After accumulating more than 600k of unrealized losses on my portfolio, I wrote this article to encourage friends and investors who are also losing a lot of money to the market.
If You Are Feeling Depressed From Losing Lots Of Money In The Stock Market, Here’s An Article For You

In the 10 years of my investing journey, I have made many mistakes but also learned many lessons from these mistakes. I compiled the 10 most valuable lessons that I have learned and may they help you succeed in your investing journey.
Happy 10 Years Of Investing | 348k (Realised) Profit, 635k (Unrealized) Loss & 10 Lessons Learnt

The precious 6 lessons I learnt after cutting more than half a million of losses in the stock market through bad investments and risky trades.
6 Lessons Learnt After Losing 551k In 10 Years Of Investing & Options Trading | What Newbies Should Know They Start Investing/ Trading

How I managed to build a 1M investment/ trading portfolio despite coming from humble beginnings.
How A Poor Kid Got To A 1M Investment Portfolio | Tips & Principles Of Building Wealth

I did these 10 side hustles while holding a full-time job, so I share them here so you can be inspired to grow your wealth through a side hustle that you enjoy.
I Did These 10 Side Hustles While Working Full Time | 10 Side Hustle Ideas To Help You Earn An Extra Income

Struggling with inflation and high cost of living? Try these 10 methods to help you save money and accumulate more savings for investments or rainy days.
10 Ways To Save Money To Help You Fight Inflation & Rising Costs Of Living

Why I am building $120,000 of cash reserves in Singapore Savings Bonds (SSB) & 5 reasons why I think SSB is a worthy low or zero risk investment that you can consider.
Why I Am Building $120,000 Of Cash Reserves In Singapore Savings Bonds (SSB)? | 5 Reasons Why SSB Is A Worthy Low Risk Investment

Sharing why I am doing Dollar Cost Average (DCA) into SPY and QQQ ETF for long term investments and a step-by-step guide to doing it automatically with Interactive Brokers.
Why I Am Doing DCA (Automatically) For SPY & QQQ For My Long Term Investment? (20% ~ 30% Upside Potential) | Step By Step Guide To Activating Automatic Recurring Investment On IBKR

*** FREE MOTIVATIONAL BOOK ***

If earning more money from your investment does not excite you anymore, you may be seeking a purpose that brings fulfillment and meaning in life. I have written a motivational book that may be useful to you in some ways. You can also download a free copy here:
https://learninginvestmentwithjasoncai.com/finding-the-magical-realm-of-happiness-motivational-book