≡ Menu

Stopped out General Motors (GM)

I hit my stop loss on GM.

music selection:  “Don’t Dream It’s Over” — Crowded House

I sold shares of General Motors (GM) short on 10OCT2016 for 32.32 a share.  The thesis is the growing amount of deep subprime lending is destined to end badly for the big auto makers.  I still believe in that thesis and see used car prices are beginning to fall.  But Mr. Market is feeling euphoric about Detroit.  I hate to realize the loss but I respect my stops.  I’ve learned the hard way on that point.

I bought to close today at 40.42 a share.  The trade was in force for 353 days and yields a negative 26.49% annualized.  I am recording a loss of 1,255 on the transaction.

I am still in Ford (F) and have a 13.68 stop loss on the short.  Shares closed yesterday at 11.96, so I still have some wiggle room.  Here’s to hoping F works out better for a lizard.

Devour your prey raptors!

{ 6 comments… add one }
  • Chris B September 28, 2017, 3:02 pm

    Hi Lizard,
    I’m curious, do you calculate your long-term ROI by strategy? E.g.
    -covered calls
    -cash secured puts, non-UVXY
    -cash secured puts, UVXY
    -other options strategies
    -short stocks
    -long stocks
    -high yield bonds

    • The Lizard King September 28, 2017, 3:42 pm

      I hate to disappoint but I’m not that sophisticated. I target 12%+ for non UVXY options strategies.

  • My Dividend Pipeline September 28, 2017, 6:59 pm

    Raptor,

    I remember this trade of yours well because I had the opposite belief. We’ve all been there. In the fall of 2015/spring 2016 my lack of stops on oil companies hammered me pretty hard. It happens to the best of us!

    MDP

    • The Lizard King September 28, 2017, 8:32 pm

      It is a hard market to be short in. But that is when you need the protection most.

  • Maria September 29, 2017, 12:20 pm

    Thanks for the update. It is indeed hard to respect stop losses, mental discipline is key. I just learned the hard way, I am short XLE and TXN call options and ignored my stop losses.

    • Chris B September 29, 2017, 5:39 pm

      The hard part for me was to switch from a long-term investor’s mindset inspired by Franklin Graham, John Bogle, and Warren Buffett to a more transactional, risk-managed approach. In one of my first options trades, I slowly lost $5k on a big bet with GLD puts because at each step I still believed in the underlying rationale of the trade. With each loss, there was less to lose by waiting to see how things turned out next week, so I waited. My puts expired worthless before my rationale played out years later.

Leave a Comment

CAPTCHA
*