Monday I woke up early for some odd reason. Maybe I was meant to crack open an anatomy textbook and memorize all that involved the heart. But no, instead I was rubbing my eyes and walking around in the dark looking for my Blackberry.

Before the market opened, I was on hold with my broker trying to snag up some Indy Mac shares. I mentioned in my previous post about the buyout and noted that there would be a gap up at the open with heavy volume. But looking at the premarket data, it seemed like Indy Mac was going to explode a little later than expected. Maybe because a lot of people are in holiday mode. I don’t know.

Being a penny stock and one that trades on the OTC, Indy Mac (IDMCQ) started off at less than $0.05/share and I placed a market order for 20,000 shares. Talk about risky. This is against my tactics on the market but maybe it was the combo of my broker hyping me and the adrenaline gushing, but I placed an order and almost immediately panicked. I kept wondering what the executed price would be and what if I get ripped off. Within a few moments with my broker, I was given a confirmation that I owned 20,000 shares at $0.06/share. I was surprised that it was not higher, but a little worried that the price might decline.

by shadowmancer76

For those that don’t know about OTC Stocks (aka Pinks), Wikipedia has a link and so does Forbes Investopedia (Link)

In a matter of 40 minutes, the price shot up on high volume to over $0.17/share. I once again had to call my broker and being on hold the price started to tank. Again worried that there might be another rally to pump the price up, I got out at $0.15/share after watching it fall and rise again. Maybe I sold early because only a few minutes later, the price went up another penny. But I was happy to be out.

This all was a work out for me physically with the racing heart. Its probably why I tell all my friends not to trade on emotion, not to let panic take over your thinking patterns and this is how people can lose a lot of money fast. I was lucky today that this did not occur. I didnt even calculate how much I had made in 40 minutes. But here is the break down.

Buy – 20,000 shares @ $0.06/share = $1200
Sold -20,000 shares @ $0.15/share = $3000

Profit today: $1800USD!! Thats a nice days work don’t you agree?

I am certainly relieved that today’s risk did produce a reward. But going back to 1999, I had a similar trade with a stock I won’t mention but the exact opposite took place. It took me almost a year to recover from that dreadful trade back in 1999 but today I guess was a sweet victory.

Another trade that I should have done but didn’t was to get out of (NT). I had a good chance Monday to profit on my holding and then buy in at a cheaper price again but got caught up in my earlier trade. Oh well.

(FRE) was a stock that I was hoping would come down today a little more but didnt. I will be watching it Tuesday to try to get in on some action. (CPY) fell Monday 11% which only means that tomorrow has to be a upswing in price at some point. If this stock can touch $3 I will definitely try to buy a position. Otherwise, just going to see how the market activity picks up.

Tuesday has me involved in a few things besides the stock market. I have to plug in 7 hours studying for my board exam as usual but also need to take care of a business project that I’m working on in the State of California, I need to work on a business plan with a group that asked me to invest in their idea and also I need to take care of some rental property business with tenants. Its a busy day and week!

Also, for those looking to calculate their positions compared to the markets for 2008, check out this Bloomberg video:

I hope you all a great trading day! Make some money!!

Happy Investing!

Aman, MBA

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