Bolling: Be a Trader, Not a Gambler

I remember a trade I almost made six years ago like it was yesterday. It was winter 2002 and the weather was absolutely freezing. Gas was ripping higher and I was bullish -- I was long 100 April $7 calls in natural gas.

I remember the day the calls went a full dollar in the money. I was up a cool $1 million on the trade. I will never forget the next conversation I had. I went to sell the calls and the guy holding the bid backed off a touch. He backed off by a small amount, but enough to tick me off.

The trade was still massively profitable, but I let this guy get into my head. I thought: "Fine ... but you will be sorry, this market is going higher." It didn't. Instead of hitting the next best bid to get out, I got stubborn.

I was no longer trading, I began to hope. I was trying so hard to be right, to show this guy (whom I would probably never see again) that I was right. I left the position on.

The next day natural gas started its massive selloff. I stayed long for the whole ride down. I sold those calls for about my buy-in price. I left the whole $1 million winning trade on the table.

It is one of the most frustrating trades in a career filled with thousands and thousands of trades. It was a combination of ego, greed and sheer stupidity that put me in that position.