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C.V.: Yes, and it's not a pleasant experience. During the summer of 1997, I had a short position in corn. The market opened limit up on Monday morning through my stop. I am suspicious of Monday morning gap openings up, and I thought there was a good possibility that this was a move designed to shake out the shorts. I checked prices on my real-time dial-up service every 10 minutes. My position was in the September contract. After about 20 minutes, the December contract came off limit. At that point I knew I could lock in a straddle by buying December, but it seemed reasonable to wait for September to come off limit, which it ultimately did. It came down a couple of pennies and held. When it started back up again, I got out of my position. The whole process seemed to take most of the trading day, but as I review my trading log, I see that I had completely liquidated my position within one and a half hours of the market open. |
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Neal: Do you have any advice for someone contemplating a career in trading? |
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C.V.: As is true in any profession, the best way to start is right out of college. Go to Chicago and learn about trading from the bottom up. Becoming a futures trader in mid-life is more complicated because of financial obligations. You should cover any and all financial obligations with nontrading funds. And what's very important is to take the time to learn to identify and trade trends. For the off-the-floor trader this is the most efficient method of trading. Don't try to day-trade the S&Ps. Do not buy a system; you are better off developing your own. Do not try to pick tops and bottoms. Finally, learn the basics of risk management. Remember, the size of your trade is totally within your control. Keep your risk small. A good rule of thumb is to limit risk per trade to between 2 and 3% of trading equity. |
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Neal: A number of people I have spoken to have stated they started trading futures because they did not have |
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