Cut THI nightmare on Mar 27,2006 (Mon)

It is Monday (Mar 27,2006)

When I wake up in the morning, at arond 9:00, I opened the IB and Ameritrade windows. What I am expect? I am expect lower ask price of JRCC (It closed at 34 on Last Friday when my total dropped to 46000).

I saw bid price was 37.xx. I didn't care, then I saw there were 500-600 shares settled at around 37.xx which made me very upset that I saw my balance dropped to 41400 when JRCC was 37!!

I closed the windows at home then I drive to office. Then I saw JRCC started at around $34.4, I relaxed a little bit. But JRCC continue rises to 35.00.

I decided to short JRCC again. From 13:18 to 13:33PM, I shorted 1100 shares of JRCC between (35.00-35.03), unfortunately, JRCC didn't stop rising, it even hit 35.5 near 2:00PM. Then I realized I was facing the music.

In the mean time THI (Tim Hortons) continues down side drop, I dropped to $27 level. At 2:00PM, both my JRCC and THI were in deep loss ( JRCC around 2000, THI around 3000). The leverage ratio is near to 3.0. It hits margin call at 13:37PM, so IB sold 100 JRCC at 35.11.

I have to decide cutting lass in one stock and save the other. Which one to cut? THI or JRCC? THI was continuously weak which have to be ascribed to fundamental reason(US expansion doubt). JRCC is a small stock having big valuation. There is no fundamental further good/bad news at this level. The stock price is approching its mid line of bolline line. It should have more chances to fluctuate down to let me escape.

So I started cut 1000 THI from 13:44 to 15:38. Pricing from (27.17-27.27). considering the cost of around $30.08. My loss in THI is
around $2800.

After cuting THI, I still had room to save my JRCC. I continue shorting JRCC. I shorted another 300 JRCC at 35.14, 35.15, 35.17 at 13:36PM. Now my position of JRCC is 3000. Even though THI is cleaned. I am still bearing big risk. What if JRCC climb again tomorrow? I have to think of a way to escape!!!!

So I began to enter lower priced bid order like 34.80. I covered 300 JRCC at 34.80.
When it was 3:30pm near closing, the JRCC used to drop to 34.70, but I didn't catch up this chance. It bounced back to around 35. I have to take actively cut loss. I entered couple of 34.98 orders selling JRCC. I sold 300 more JRCC at $34.98. Then the remaining 2400 JRCC SHORT can save me from margin call.

The JRCC closed at 35.06.

Today's result:

THI: Lose $2800.
JRCC: Lose $500

Ending balance: $43000.

What is bad day!!!!!!