Ahh.. the life of a stock or stock option trader. Glamorized in films and on financial television. Said to produce unheard of wealth in weekend radio shows. Mentioned as an alternative to that commute to work for those who just want to stay home in their pajamas. Well we have to tell you dreamers it is not like that.
Stock option trading we have been doing for going on 3 decades now and "full time" for just over 5 years now. We have yet to have a losing year and even had some 40% plus profit years on at risk capital, but trading is hard work and extremely risky which requires patience, time, and lots of willingness to lose money when necessary. Yes, we get up from my bed in the mornings and move across the hall to my trading desk, but understand that is normally at 6 AM and for most traders that is a late start. Below is a typical day in a traders life.
Rise at 6 AM, after going to bed no later than 10 PM. Get a shower and be at our home trading desk before 6:30 AM. Our desk is a L shaped desk so as to have two different places to view open trading material at any time. We have a computer but we keep ALL our trading in a written folder for quick reference due to the need for quick info when markets begin to move in my direction. We also back it up online for mobile viewing and a check against our written records. Generally our trades are valued at around $100,000 so one trade a unforced mistake can be lethal to your portfolio so keeping two sets of records virtually eliminates such errors. Our current computer which straddles the L desk is a 23 inch all in one that keeps desk clutter down and everything we need close by. On the desk on one side is a 32 inch TV for keeping up with what is being talked about on financial networks. We favor CNBC Squawk Box in the mornings, but will switch if we find something elsewhere on most useful. Two lamps, one Android big screen cell phone, good writing pens, legal pad, large sticky pad, and one radio are on the desk. The cell phone is for keeping abreast of stock movements when away from my home office and the big screen phone is most easy for seeing stock pricing info.
From 6:30 AM until the market opens at 9:30 AM the time is spent reading and getting updated on market and financial activity and news. Some of the web sites we read each morning are listed below.
Drudge Report..great for breaking national news
Seeking Alpha..absolutely the best financial site online. Mobile site too.
CNBC..good for late breaking financial news
Wall Street 24/7..second best site online. fabulous analysis of late news
WRAL..weather info and local news
Stifel Nicolaus.. broker with excellent stock reports
Doug Kass..use his free info from blog and twitter. permabear with spot on stock picks. keeps us grounded
Marketwatch...good for instant financial news. Wall Street Journal's free info
Yahoo Finance..good for individual stocks info and best message boards
The Street..keep an eye here just in case something on my stock list pops
Jennifer Rubin..good political analysis
The Corner...good political info
Town Hall..good political info
Weekly Standard..good political info
Carolina Plotthound..excellent North Carolina based political site
Sampson Independent..local news
Fayetteville Observer...local news
Jacksonville Daily News...local news
The News and Observer...local news
Carteret County Times News...local news
Wilson Daily Times...local news
Goldsboro News Argus...local news
The Robesonian...local news
NC Press Association...local newspaper news
Business Insider... alternative news source. very young people readership oriented
Carolina Journal..political analysis
JFL Locker Room..political analysis
American Thinker...national political analysis
New Geography...alternative Forbes site with interesting data
Triangle Business Journal...local business news
Morningstar...national stock analysis
MSN Finance...national financial news in analysis
Real Clear Markets..good columns on financial news
Real Clear Politics..good columns on political news
Zero Hedge...very alternative financial analysis.
Twitter..we follow some financial tweets
Opinion Journal...Wall Street Journal opinion page
Carpe Diem..very upbeat capitalism site
McDep Oil...best oil and gas analysis anywhere
Here is where most people would fall short and lose when trading. This activity requires hours and hours and hours of reading. The purpose is quite simple to keep up with market action, financial news, bond news, and of course follow the up to 30 stocks we favor. In the current environment the need for broad thinking on politics is essential due to the huge impact current policy has on the markets, hence the political reading. You will always be surprised with the local websites and where you might find some helpful investing info too.
We know early on if the market is moving in our direction and will either make trades by 10:15 AM or move on for awhile. If we do not make trades we will go get a quick breakfast at our local Bojangles and return by 11:30 AM to review many of the updating web sites listed above for early news updates. More reading as we said
We will generally keep a close eye on the market until around 12:30 PM when we will take a break and go do something else or run household chores. We will return around 2 PM to check on the market and see if the late market action offers any trading opportunities and continue to update ourselves on financial news. More reading.
If we do not trade we might take some time to get a quick burger at a local joint around 3:30 PM were we get a chance to unwind and a quick 30 minute walk at our local inside walking venue. Then back to the trading desk.
We will get back to CNBC around 4:30 PM for after market news and our regular dose of Fast Money at 5 PM. Add in a few minutes of Jim Cramer at 6 PM and we are done for the time being. We can only stand so much of Cramer, but find his first 15 minutes worth listening. We will check out some local and national news on TV up to around 7 PM to make sure we have missed no news that might effect the next day's markets. We take a break for an hour here to relax.
Around 8 PM we will get back to the computer to review late market news and overseas action. Then as we noted above we will hit the bed around 10 PM.
Now does this sound like a traders life you might have envisioned? If you are considering doing stock or option trading think hard as the time involved is extensive We even read on the weekend and absolutely Sunday evenings before Monday trading. As we noted we keep up with around 30 stocks on an ongoing basis and if we add a security it requires many extra hours to research and get up to date. The profits are very good for good traders of course, but a glamorous life it is not. We make around 12% to 18% on our at risk capital so one must have some significant assets or access to assets via a large margin account to make this work for a living and live the traders life.
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