A great lesson for stock market traders below:
Dreaming to be rich is normal. Almost everyone of us dream to be so. And we try to achieve the goal with the means we have. But without a proper game plan, the journey becomes ordeal. When greed takes over a human brain there is no looking back and sometimes the losses which may come in between are irreparable.
Although, we do not now if it was greed or a risky bet or a rather a smart analysis which went wrong, but Joe Campbell, a normal trader, lost over 96 lacs in few hours! Joe did some stock market analysis and found that if he sells pharma stocks, which were already going in a downtrend and buy them later, he can make a quick money.
The idea was not bad. Pharma stocks were really heading south and Joe found a stock, KaloBios, which didn’t showed too much downfall to fall. Moreover, this company was planning to reduce the operations due to fund issues. His analysis was that this stock will be dumped soon like other pharma stocks. He had $37000 in his trading account at E-Trade. He used this money to sell KaloBios and something happened. An ace businessman, Martin Shkreli, who is CEO of Turing Pharma bought majority stake in this.
KaloBios gained upto 800% after that and Joe was now in a huge loss. His account looked like this.
Almost in a bankrupt state, Joe took help of GoFundMe which is a crowdfunding portal like Krowdster , to donate and help him.
With the help of some people, Joe managed to get out of this mess.
Lesson:- Put stoploss when trading. At least when stakes are high.
Fortunately, it cannot happen in India as we have robust rules and leverage is also limited. Once a person crosses the limit set for a stock, brokerage firm automatically squares off his trade.
Team Freshticles – Fresh Articles, Refreshing Reads.