I go senile, day trade on margin, wash sale, and...

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
livesoft
Posts: 73221
Joined: Thu Mar 01, 2007 8:00 pm

I go senile, day trade on margin, wash sale, and...

Post by livesoft »

I thought folks could have a good laugh at my expense.

Last week I funded my HSA SDBA, so I submitted an order to buy an ETF with my new account, except ….

I used the wrong account and bought some shares with money I didn't really have, but it was a margin account so the trade went through. The next day I discovered my error and sold the shares that I had bought on margin at a slightly higher price. But the price was not high enough to cover the commissions, so I created a small loss. I had bought the same ETF in an IRA, so I created a wash sale that I cannot deduct on my taxes. In summary:

Wrong account.
Day trade on margin.
Wash sale.
Paid commissions.

OTOH, the market dropped on Friday, so I can day trade in the HSA --- not.
Wiki This signature message sponsored by sscritic: Learn to fish.
sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: I go senile, day trade on margin, wash sale, and...

Post by sscritic »

I always enjoy a good laugh. Thanks for sharing.
john94549
Posts: 4638
Joined: Tue Jul 26, 2011 8:50 pm

Re: I go senile, day trade on margin, wash sale, and...

Post by john94549 »

I did not buy anything Friday. As a result, the power to the microwave, garbage disposal, and dishwasher went out on Sunday. Checked all the obvious culprits , breakers and such. Wife is calling the electrician today.
User avatar
prudent
Moderator
Posts: 7624
Joined: Fri May 20, 2011 2:50 pm

Re: I go senile, day trade on margin, wash sale, and...

Post by prudent »

That's a good one, livesoft. :) I laughed.
User avatar
nisiprius
Advisory Board
Posts: 41813
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: I go senile, day trade on margin, wash sale, and...

Post by nisiprius »

I once started a thread which I can't find now asking people what sorts of mechanical mistakes they'd made placing orders, and as I expected there were plenty.

One of my own was once ordering Vanguard FTSE All-World Ex-US when I meant to order Vanguard Total International because I'd forgotten the ticker symbols, got confused about which was "the" international index fund, ran down the list of names, and say "Oh, this is it" when I got to the FTSE one.

One of my most terrifying moments, which fortunately turned out not to be a mistake, was when I meant to order five (5) TIPS from Fidelity, and a confirmation email came through confirming my purchase of "5,000" TIPS. I gasped and wondered exactly what was going to happen, but fortunately it turned out that when you order, the number you type in is the count of the number of bonds, but the number in the confirmation email reports the par value in dollars--without any currency symbol.

But I do monitor myself and am concerned with whether I will be able to detect the point at which my cognitive decline is getting dangerous. One warning sign: I'm part of a multigenerational Disney trip someone else is organizing, and as I was booking my reservations on the site, a little popup came up asking if I wouldn't like to have a Disney-branded credit card, offering a $200 statement credit the first time I use the card and just a $49.95 annual fee. And I said to myself "free money!" and went for it without asking too many questions. The site had already been sprinkling me with pixie dust, I was in a happy trance from just having chosen a smiling Carl Fredricksen (the old guy in Up!) as my avatar, and it just seemed like the right thing to do. The issue is not that it was a mistake or a bad decision--I don't think it was. What's troubling is that it was an out-of-character impulsive move.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
zotty
Posts: 841
Joined: Tue Sep 15, 2009 5:18 pm
Location: DFW, Texas

Re: I go senile, day trade on margin, wash sale, and...

Post by zotty »

Fat finger!

I bought a 4K in ten year notes when they touched 3, at the start of the year. Never bought an individual bond before.

I dutifully placed an order for 4 million dollars in 10 year treasuries. Thankfully, vanguard balked, "call their help desk"... whew.
Nadie Sabe Nada
User avatar
HueyLD
Posts: 7698
Joined: Mon Jan 14, 2008 10:30 am

Re: I go senile, day trade on margin, wash sale, and...

Post by HueyLD »

.............
Last edited by HueyLD on Sun Feb 08, 2015 5:05 am, edited 1 time in total.
User avatar
Jay69
Posts: 1801
Joined: Thu Feb 17, 2011 9:42 pm

Re: I go senile, day trade on margin, wash sale, and...

Post by Jay69 »

Nice job!

With having 7 retirement accounts I sometimes think how nice it would be to have one all-in-one fund in all accounts.

I pulled one of our IRA contributions (the max contribution) from the wrong account last year, no big deal as enough funds existed in the wrong account. As one gets older and how fast the transactions happen online and I'm guessing the transactions will get nothing but faster it may get interesting. You will have the thought and it will just happen!
"Out of clutter, find simplicity” Albert Einstein
sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: I go senile, day trade on margin, wash sale, and...

Post by sscritic »

nisiprius wrote:I once started a thread which I can't find now asking people what sorts of mechanical mistakes they'd made placing orders, and as I expected there were plenty.
I remember that thread and shared that I had bought one Total Index when I wanted to buy another Total Index. I mean, who cares if it was US or International as long as it was both Total and an Index? :)
User avatar
nisiprius
Advisory Board
Posts: 41813
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: I go senile, day trade on margin, wash sale, and...

Post by nisiprius »

Jay69 wrote:Nice job!

With having 7 retirement accounts I sometimes think how nice it would be to have one all-in-one fund in all accounts.

I pulled one of our IRA contributions (the max contribution) from the wrong account last year, no big deal as enough funds existed in the wrong account. As one gets older and how fast the transactions happen online and I'm guessing the transactions will get nothing but faster it may get interesting. You will have the thought and it will just happen!
Oh, no. They will do anticipatory ordering and it will happen before you know you are going to think of it.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
Sbashore
Posts: 950
Joined: Wed Feb 20, 2008 10:38 pm
Location: Goodyear, AZ

Re: I go senile, day trade on margin, wash sale, and...

Post by Sbashore »

Thanks, great story. Reminds me of a guy I used to work with who lost $800 one day trying to place an order after he'd been drinking. Got to pay attention to which button you click. :happy
Steve | Semper Fi
User avatar
nisiprius
Advisory Board
Posts: 41813
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: I go senile, day trade on margin, wash sale, and...

Post by nisiprius »

Sbashore wrote:Thanks, great story. Reminds me of a guy I used to work with who lost $800 one day trying to place an order after he'd been drinking. Got to pay attention to which button you click. :happy
I lost a couple of hundred dollars once on a hotel I needed for a trip to the Netherlands in October. Booked it for 10/7/1999 and didn't discover my mistake until the credit card bill came in August.

The really annoying thing is that I KNEW about the date order thing and was thinking about it when I placed the order. My "thought" process must have been something like "I need it 10/7 but in Europe that's 7/10 so I need to be reverse that and type 10/7."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
RNJ
Posts: 841
Joined: Mon Apr 08, 2013 9:06 am

Re: I go senile, day trade on margin, wash sale, and...

Post by RNJ »

I once added an extra "0" to an order for a (thankfully) light traded ETF.
likegarden
Posts: 3024
Joined: Mon Feb 26, 2007 5:33 pm

Re: I go senile, day trade on margin, wash sale, and...

Post by likegarden »

I just did something similar, am also a retiree. I did not trade or exchange funds for a while, so was rusty. I decided that it is not good to have too many Intermediate Term Bond Fund which had a loss over 2013. So I exchanged at Vanguard $ x0k against the same $$ of Short Term Bond Fund. Then later I realized that I should rather have held the Intermediate Bonds and tried to exchange back, but that now is not permitted until 2 months from now to prevent frequent trading. So I will wait until 2 months from now and compare again. Otherwise I am OK though!
User avatar
nisiprius
Advisory Board
Posts: 41813
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: I go senile, day trade on margin, wash sale, and...

Post by nisiprius »

likegarden wrote:I just did something similar, am also a retiree. I did not trade or exchange funds for a while, so was rusty. I decided that it is not good to have too many Intermediate Term Bond Fund which had a loss over 2013. So I exchanged at Vanguard $ x0k against the same $$ of Short Term Bond Fund. Then later I realized that I should rather have held the Intermediate Bonds and tried to exchange back, but that now is not permitted until 2 months from now to prevent frequent trading. So I will wait until 2 months from now and compare again. Otherwise I am OK though!
It's not permitted if you place the order by any rapid means, such as online or fax, but if you want to get this cleaned up without putting a note to yourself in a tickler file to take care of it in two months, see Frequent trading policy. You can place the order now, by mail, or you can set up a "one-shot" automatic transfer.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
Random Musings
Posts: 5761
Joined: Thu Feb 22, 2007 4:24 pm
Location: Pennsylvania

Re: I go senile, day trade on margin, wash sale, and...

Post by Random Musings »

To summarize:

Do as Livesoft says, not as he does. :oops:

RM
I figure the odds be fifty-fifty I just might have something to say. FZ
User avatar
dratkinson
Posts: 5021
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

Re: I go senile, day trade on margin, wash sale, and...

Post by dratkinson »

nisiprius wrote:I once started a thread which I can't find now asking people what sorts of mechanical mistakes they'd made placing orders, and as I expected there were plenty.
I remember that thread and shared that I now create a checklist for every transaction I plan to make a day or so before the transaction date. I list account, fund/etf, amount, IRS restrictions, Vanguard restrictions,.... I check it that it is really what I want to do and for compliance. I double-check it and use it again (checking off each item as submitted) when I make the transaction.

Completed checklist and Vanguard's mailed documentation are stapled together and filed in a binder as my tax documentation.

So far so good and no repeated past mistakes. (Knock wood.)



P.S. I learned to rely upon checklists in a prior life. There they claimed that checklists made a job so simple a monkey could do it---"Read a step, do a step, eat a banana."

Of course, the checklist creator, at his leisure, must handle all of the ambiguity and conflicts to allow for it's simple use during execution.
d.r.a., not dr.a. | I'm a novice investor, you are forewarned.
User avatar
fishnskiguy
Posts: 2604
Joined: Tue Feb 27, 2007 1:27 pm
Location: Sedona, AZ

Re: I go senile, day trade on margin, wash sale, and...

Post by fishnskiguy »

dratkinson wrote:
nisiprius wrote:I once started a thread which I can't find now asking people what sorts of mechanical mistakes they'd made placing orders, and as I expected there were plenty.
I remember that thread and shared that I now create a checklist for every transaction I plan to make a day or so before the transaction date. I list account, fund/etf, amount, IRS restrictions, Vanguard restrictions,.... I check it that it is really what I want to do and for compliance. I double-check it and use it again (checking off each item as submitted) when I make the transaction.

Completed checklist and Vanguard's mailed documentation are stapled together and filed in a binder as my tax documentation.

So far so good and no repeated past mistakes. (Knock wood.)



P.S. I learned to rely upon checklists in a prior life. There they claimed that checklists made a job so simple a monkey could do it---"Read a step, do a step, eat a banana."

Of course, the checklist creator, at his leisure, must handle all of the ambiguity and conflicts to allow for it's simple use during execution.
Checklists. Oh, yes. So many. You live or die by the checklist.

Rig for dive checklist
Rig for surface checklist
Long form precritical checkoff checklist
Shortform precritical checkoff checklist
Shutdown checklist
Cooldown checklist
Rig for deep submergence checklist
Rig for silent running checklist
Rig for general emergency checklist
Pre underway checklist
Entering port checklist
Rig for visitors checklist...... My favorite. Cover up all the classified equipment, make sure all the heads have toilet paper, verify the Doc is on board in case somebody gets claustrophobia.

There were others, but they escape me at the moment.

Chris
Trident D-5 SLBM- "When you care enough to send the very best."
User avatar
joe8d
Posts: 4438
Joined: Tue Feb 20, 2007 8:27 pm
Location: Buffalo,NY

Re: I go senile, day trade on margin, wash sale, and...

Post by joe8d »

Sbashore wrote:Thanks, great story. Reminds me of a guy I used to work with who lost $800 one day trying to place an order after he'd been drinking. Got to pay attention to which button you click. :happy
:D
All the Best, | Joe
User avatar
LadyGeek
Site Admin
Posts: 65861
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: I go senile, day trade on margin, wash sale, and...

Post by LadyGeek »

nisiprius wrote:I once started a thread which I can't find now asking people what sorts of mechanical mistakes they'd made placing orders, and as I expected there were plenty.
Would it be this one? How often have you goofed and placed an incorrect order?

Here's a thread by grabiner, which is somewhat related: Your worst investing mistake
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
Jfet
Posts: 1081
Joined: Tue Dec 21, 2010 7:20 pm

Re: I go senile, day trade on margin, wash sale, and...

Post by Jfet »

I once accidentally bought 10,000 Bank of America options once at a $8 strike for $0.05 each and had to immediately sell them for $0.04. A week later they were trading for a buck.
User avatar
Epsilon Delta
Posts: 8090
Joined: Thu Apr 28, 2011 7:00 pm

Re: I go senile, day trade on margin, wash sale, and...

Post by Epsilon Delta »

Select checklist checklist?
Caduceus
Posts: 2745
Joined: Mon Sep 17, 2012 1:47 am

Re: I go senile, day trade on margin, wash sale, and...

Post by Caduceus »

Atul Gawande has written a brilliant article about the checklist. His examples are primarily drawn from medicine, where checklists have reduced doctor error in a revolutionary manner, but the insights are generally applicable. Here is the link to the article in the New Yorker:

http://www.newyorker.com/reporting/2007 ... ct_gawande

(It's 8 pages long - click the tiny turn buttons at the bottom)
peppers
Posts: 1434
Joined: Tue Oct 25, 2011 7:05 pm

Re: I go senile, day trade on margin, wash sale, and...

Post by peppers »

Yep, and so it begins

...the advisory sharks are circling, smelling blood money in the water
...assisted living facilities send out colorful brochures promising the good life
...you pay more attention to actors pushing term life insurance on TV so you won't be a burden to your loved ones
...you make it a point to watch "The View" in the morning and "Ellen" in the afternoon
...your adult children keep telling you "Dad, get off the computer, you're only going make it worse"
...prunes become a daily staple

There's more, but I can't remember right now...
"..the cavalry ain't comin' kid, you're on your own..."
User avatar
Jay69
Posts: 1801
Joined: Thu Feb 17, 2011 9:42 pm

Re: I go senile, day trade on margin, wash sale, and...

Post by Jay69 »

How come nobody ever makes a mistake on my Ebay auctions, like an extra zero or two 8-)
"Out of clutter, find simplicity” Albert Einstein
Post Reply