I lost over 600k on short term option gamble last 3 weeks, all my profit since 2020. I started with 200k principal on last March, invested most of them on Redfin stock when it is crushed and under $15, then just hold and my account reached the peak this January, over 800k. Since this February I started short term option daily trading as a newbie, at the beginning I just started with 5-10k position but then I went to bigger and bigger, some times I bought hundreds of call/put and I am always on opposite side. My account went from 800k to 80k in three weeks, last Friday rebounding made the account back to 210k and I withdraw all of them into my checking account. One worse thing is I realized 300k profit last December for housing, so I still owe IRS more than 100k tax for 2020, may be I will carry this 300k as tax loss in my rest of the life? My wife never blame me but Iâm sleepless this month, 600k is huge and I was able to buy so many things for my baby and wife. Hope my regrets can save other people who is also doing short term option gamble. May be one day you will be regret like me. Tc 150k House TC 310k Updated, sorry for the confusion, I sold Redfin stock last December with 300k paper profit, planned to buy some realty this spring but I still kept this 300k in my broker account, then I also lost on option gamble. And I still owe IRS 300k x 0.37 tax in 2020. Yes, I made every mistake you can image. I tried to revenge option trading after losing, the most stupid thing. originally I only lost 20-30k on short term option, nothing comparing with 600k profit, but then I tried to revenge short option trading after losing 30k, then losing 50k, again and again, some times I earned back 10-30k and gave me some fake hope but overall my loss rate like 60-70%, so after more than 200 daily options trading in three weeks I lost 600k, I am a idiot. Update 3/10, today is my brithday and I did a long talk with my wife, I donât think I have gambling addiction but feel some kind of paranoid personality disorder, I usually stuck and repeat the same routine/pattern, not only option trading but also daily routine and many other things, may be that is also the source of my exterme tolerance on huge loss. I will go this with the psychologist. Both my wife and me think my character isnât suit for stock/option trading, instead, my wife will invest etf in future, in case I want to invest some good stocks, she will help me in her broker account, her character is totally different than me, calm/timid/discipline
Holy shit!
Sorry to hear!
Technically you did lose? I was up 40-50k but last three weeks it wiped out all the gains and I feel extremely stupid
Yes, I permanently lost 600k since theyâre weekly options, some times I sold them and cut the loss and some time they just expired. May be as other people said, easy come easy go, I easily earned more than 600k from Redfin stock and lost all of them even easier. I am back to normal now but I canât sleep past 5 days. Just invest and stay away with gamble, you may have much better skills than me but one day still wiped out.
You didn't lose 600k. You started with 200k last year and cashed out at 210k (5% profit).
Holly molly. But then you made 10k profit, a good learning lesson, and you shut this FOMO feeling forever.
No, I think I still owe IRS over 100k tax for 2020, since I realized 300k gain last December, when RDFN first time passed $80, correct me if Iâm wrong.
Seems the case (unless you have this trader tax status I've been hearing about). However any gains in 2021 will be offset by your loss and you'll be able to carry these losses forward. Should be close to net zero at the end except for NPV effect.
Options are a casino. Greed killed you. Maybe put your money in normal S&P trackers or other diversified funds and be happy with 7% annual returns on average (or ~40% since last year). Edit: one thing you seem to have done right is only investing/gambling money you donât immediately need. Kudos for that.
options are fine but from what it seems OP only did weekly options which were probably also way OTM as well
That sounds like a rough lesson to learn, but thank you for sharing. To your point, maybe others will avoid getting caught up in short term options "gambling".
stonks bro. or you shouldve joined theta gang. you could've earned a hefty monthly income selling CCs or CSPs.. assuming you had the right foresight - which you had initially but not anymore
That begs the question was it really foresight? Or was it gambling? The first one paid off but the second did not.
Invoking âchicken or the eggâ is an apt metaphor considering the circumstances
Holy fuck, how do people still not know to keep a portion of realized gain to pay taxes
I am curious how you keep track of realized gains. I find it difficult to track gains in RH.
Rule of thumb. Move 33% from every gain into stable dividend stocks that you can sell to pay taxes. If you end up not needing the entire amount, youâve still got some money in a stable place.
Sorry dude. Lesson is that almost all traders lose money, investors make money. Be an investor.
Thank you, I also got this and will remember your words in the rest of my life, still have 30 years to investment
Investors and traders are the same shit. When you win, you call yourself an investor. When someone lost money, you call them traders lol They are all gamblers
Ouch. Take it as a life lesson.
This is what we call âstupid taxâ - gotta learn from it :)
Just paying the price to learn