{"id":3179,"date":"2010-01-04T17:18:12","date_gmt":"2010-01-04T22:18:12","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=3179"},"modified":"2010-01-08T11:02:01","modified_gmt":"2010-01-08T16:02:01","slug":"rmbs-trades-busted","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/rmbs-trades-busted","title":{"rendered":"RMBS Trades Busted"},"content":{"rendered":"

My short chop in RMBS got busted. Dov made the biggest chop on our desk and his profits were eliminated. NASDAQ put out this statement<\/a>. Tough spot for NASDQ.<\/p>\n

I am the last person to complain about this stuff. The market is like the Wild West and I have come to accept this. Trade long enough and you will as well. But as a veteran trader I was surprised by the decision to bust these trades. Here’s why…..<\/p>\n

RMBS had a sharp move down from 25. This fast down move got our attention. And then from 12:45 PM to 1:20 PM RMBS consolidated. RMBS is often involved in litigation that invites precipitous moves. Our desk wondered if some negative litigation breaking news was about to hit or had hit and this downmove was the result. On the tape RMBS could not trade above 23.40 after the sharp downmove. I got short. Spencer instructed to a few short on the desk,”Give RMBS some time. It might really tank.” This was a classic bearish technical pattern.<\/p>\n

So for 35 minutes RMBS consolidated after a sharp downmove. This is why we were all short. And then RMBS collapsed to 15.75 for a few seconds, popped to 19, and then found 22 pretty quickly. I covered near 19.70. With so much time going by and the consolidation near 23.40-23.20 this seemed like a legitimate downmove to me. Obviously the amount it traded lower was highly unusual, but the fact that RMBS collapsed was not.<\/p>\n

This was not like the DNDN move from April (DNDN dropped from 24 to 8 in like 90 seconds). I was in that move and those trades were not busted. I ate the huge rip. NASDAQ probably received a great deal of heat for this move and this may have influenced their decision to bust these RMBS trades below 20.73 today.<\/p>\n

According to NASDAQ we cannot appeal their ruling.<\/p>\n

This was a good short. One I will make again. When you see a stock make a sharp downmove and then consolidate lower, this is an excellent risk\/reward short.<\/p>\n

Interesting start to the trading year. The action in RIMM, GERN, STEC, SEED, JOYG, AAPL, CHK offered excellent intraday trading opportunities.<\/p>\n

Best of luck with your trading! Don’t forget to follow us<\/a> on Twitter.<\/p>\n

Long GERN, STEC<\/p>\n","protected":false},"excerpt":{"rendered":"

My short chop in RMBS got busted. Dov made the biggest chop on our desk and his profits were eliminated. NASDAQ put out this statement. Tough spot for NASDQ. I am the last person to complain about this stuff. The market is like the Wild West and I have come to accept this. Trade long enough and you will as … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,10,453,15],"tags":[162,365,314,18],"class_list":["post-3179","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","category-mike-bellafiore-bellas-blogs","category-trading_ideas","category-trading_theory","tag-day-trading-blog","tag-nasdaq","tag-rmbs","tag-smb-capital","no-post-thumbnail"],"yoast_head":"\nRMBS Trades Busted | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/rmbs-trades-busted\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RMBS Trades Busted | SMB Training\" \/>\n<meta property=\"og:description\" content=\"My short chop in RMBS got busted. 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