Thursday, November 19, 2015 7:45:52 PM
Published: Dec 19, 2015 3:14 p.m. ET
By SHAWN LANGLOIS
MARKETS REPORTER
His name is Joe Campbell, and he claims he went to bed Wednesday evening with some $37,000 in his trading account at E-Trade. One notable development on the housing front later, and Campbell woke up to a debt of $106,445.56. Now, he may end up liquidating his 401(k). And his wife’s.
That’s where you come in. At least where Campbell desperately hopes you come in. Of course, sympathy in the trading community over such gaffes is typically in short supply.
His is a cautionary tale of getting caught on the wrong side of one of the riskier bets on Wall Street. When you’re long, the worst you can do is lose is everything. But when you’re short, everything and a lot more is at stake. He should have known better, no doubt, but you have to feel for this poor guy.
See also: Why you should never short-sell stocks
http://www.marketwatch.com/story/why-you-should-never-short-sell-stocks-2015-11-19
This is what apparently happened, as Joe explains in his GoFundMe plea.
“I was holding FNMA short overnight for what I thought was a nice $2.00 fade coming,” he wrote. “At the close of the bell I saw the quote montage clear out and figured today there was no action after hours in the stock. So I went to my office for a long meeting. I got out of the meeting and saw a message from one of my buddy’s, he asked if I was ok since I was short FNMA.”
OK he was not. Far from it.
Fannie Mae FNMA, -10.58% stock had exploded, running up about 800% at one point in late trading after Pershing Square CEO Bill Ackman (yes, THAT Ackman) gained control of a majority of the shares. Fannie Mae had announced last week that it was winding down operations because it was running out of capital while in government conservatorship.
This is what a true trading nightmare looks like:
So now Campbell is coming to the community for some help. Good luck.
“If you don’t want to donate I understand, at least read my story of what happened today and protect yourself from the same happening to you!” he wrote. “This is a terrible lesson for me but if this helps just one person than I’m happy I wrote this.”
As you might expect, Campbell took a beating in the comments section.
Despite the backlash, they also offered some cash. After nine hours, 45 people had helped Campbell’s page raise more than $1,506. Still a long way to go, but it’s something.
http://www.marketwatch.com/story/help-my-short-position-got-crushed-and-now-i-owe-e-trade-10644556-2015-11-19?dist=tbeforebell (if you must)
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