My Worst Trades
Everyone posts their winners. Here are my losses. Options that expired worthless, warrants that went to zero, and the one GSE preferred series where I sold lower than I bought.
Why publish this?
Because everyone on FinTwit is a genius in hindsight. I'm not. My options record is 1-8. I bought warrants on a company that filed Chapter 11. I sold one GSE preferred at a loss that I'd later watch go to $22.
The losses are part of the record. If you only show the multi-baggers, you're lying by omission. Here's the full picture — pain meter included.
The GEO Group Options Trifecta
What happened
Bought 87 call contracts across three strikes ($38, $39, $40) and three expirations. All three expired worthless. Every single one.
Lesson
Buying out-of-the-money calls on a private prison REIT because you think the political winds will shift is not a thesis. It's a gamble dressed up in a thesis costume.
LUMN Calls: The Other Batch
What happened
250 contracts of LUMN Jul 2025 $8 calls. Expired worthless. This was separate from the LUMN Jan 2026 $10 calls that actually hit +293% — same company, wrong strike, wrong expiration.
Lesson
Being right on the company and wrong on the timing is the same as being wrong. The Jan 2026 $10 calls made money. The Jul 2025 $8 calls evaporated. Options don't care about your thesis timeline.
Ambac Warrants: The Transfer-and-Sell
What happened
Transferred in 1,455 Ambac warrants plus bought 50 call contracts (AMBC Sep 2025 $11 calls). Sold the warrants at $1.43–$1.45. The calls expired worthless.
Lesson
If you're selling the equity because you've lost conviction, don't simultaneously buy calls on the same company. That's arguing with yourself and losing on both sides.
QTEKW: The Warrants That Disappeared
What happened
Bought 31,877 QualTek warrants at ~$0.20 each. Sold 10,922 at $0.15 (loss). The remaining 20,955 warrants were transferred out and went to zero when QualTek filed Chapter 11 in Feb 2023.
Lesson
I got the QTEK stock trade right (+23% avg on 315K shares). But I let the warrant position ride after taking profits on the stock. The warrants are always the first to go to zero in bankruptcy.
FMCCL: The Only GSE Loss
What happened
Bought 26,350 shares of FHLMC 5.97% preferred at an average of $4.08. Sold 26,872 shares (some transferred in) at an average of $3.45. The only GSE preferred series where average sell was below average buy.
Lesson
Even within a basket of 23 GSE preferred series, some individual rotations lose money. The thesis wasn't wrong — the timing of the swap was. I sold FMCCL to buy FMCKJ at $1.91, which later hit $11+. The rotation funded a multi-bagger.
LDI Calls: The Mortgage Play
What happened
200 contracts of LDI Mar 2026 $5 calls at $0.11. The mortgage lender thesis didn't play out in time. Expired worthless.
Lesson
Cheap options feel like free lottery tickets. They're not. 200 contracts at $0.11 is still a position. When your thesis is 'rates will drop and mortgage lenders will rip,' you need to get the timing right, not just the direction.
MBI Calls: The Very First Options Trade
What happened
2 contracts of MBI May 2022 $16 calls at $0.65. Glen's first-ever options trade. Expired worthless within weeks.
Lesson
Everyone's first options trade expires worthless. It's the tuition for Options 101. Mine cost $130. Worth every penny for the lesson.
The Silver Lining
For all the losses above, the core thesis — GSE preferred privatization — generated multi-baggers across six different series. FMCCN: ~10x. FMCCJ: ~10x. FMCCM: ~9x.
The FMCCL loss? I sold at $3.45 to buy FMCKJ at $1.91. FMCKJ later hit $11.34. The worst GSE trade funded one of the best ones.
The options losses were real, but they were bets sized small enough that losing 100% didn't threaten the core portfolio. The one winner (LUMN +293%) more than covered the tuition. Sometimes the lesson IS the return.
The Honest Math
Options Wins
1
Options Losses
8
Best Winner
+293%
Worst Loser
-100%
(x8)
AI-Generated Content — This profile was created using AI and publicly available sources. While we strive for accuracy, details may contain errors or be outdated. Quotes may be paraphrased or taken out of context. Achievements and figures are based on public reporting and may not be precise. This profile does not imply endorsement by the individual featured. Not financial advice.
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Frequently Asked Questions
Why should investors document their worst trades?
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Documenting worst trades creates accountability and accelerates learning. When you write down exactly what went wrong — the thesis, the timing, the emotional state — you create a personal reference that prevents repeating the same mistakes.
What are the most common trading mistakes beginners make?
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The most common trading mistakes include: averaging down on losing positions without a thesis change, buying options with insufficient time to expiration, over-concentrating in a single position, letting emotions override analysis, and confusing a stock's story with its fundamentals.
How do you recover from a bad trade?
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Recovery from a bad trade starts with honest analysis: was the thesis wrong, or was the timing wrong? If the thesis was wrong, cut the position and move on. If the timing was wrong but the thesis is intact, re-evaluate position sizing. The most important step is emotional — do not revenge trade.
What is the difference between a bad trade and a bad outcome?
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A bad trade is a decision made without proper analysis, risk management, or discipline — even if it accidentally makes money. A bad outcome is a loss on a well-reasoned position where the thesis simply did not play out. Good investors focus on process over results.
How much of your portfolio should you risk on a single trade?
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Most professional risk management frameworks suggest risking no more than 1-2% of your total portfolio on any single trade. For concentrated conviction positions, 5-10% is aggressive but defensible if the research is deep. Position sizing should be based on conviction level and potential downside.
Are options riskier than stocks?
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Options are inherently riskier than stocks because they have expiration dates, meaning you need to be right about both direction AND timing. A stock can recover from a drawdown; an option cannot if it expires worthless. Options also have time decay (theta) working against the buyer every day.
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