In an attempt to stay engaged with the market, I purchased a in XLF in the December expiration cycle. This was my most boring trade of the year, as well as my biggest loser in terms of final P/L. I held this thing for 60 days – 2-3x longer than I hold most of my positions. Its loss was slow and grueling, and never once did this position work in my favor. I only placed this trade because there was such low implied volatility in the market that opportunities were extremely scarce. The only way to make money, in my opinion, was to take a directional shot. I chose because the market had been rallying for weeks at this point and I thought we might be due for a correction. Little did I know how wrong I'd be. Thankfully, due to this strategy's lack of probabilistic edge, I kept this trade extra small by choosing a low-priced, low volatility underlying. This allowed me to set my max-loss threshold (the far above the share price. The market ended up rallying so hard that my seemingly "far away" strike was eventually breached. Sadly, I ended up with a near-max loss at expiration.

It's funny... At face value this would have appeared to be my lowest risk, most conservative trade of the year. The risk was small and limited, the underlying was extremely low volatility, and yet it cost me more money than almost any other trade – second only to a botched KRE The big difference is that I had the opportunity to defend my KRE position – XLF, not so much. Trades like this are the reason I hate being forced to take directional shots. For so many reasons, I hereby dub my XLF long put vertical Worst Trade of 2019! Good riddance!

This loss completely blindsided me. The original trade was a slightly bearish December EWY strangle which actually started out on a high note. The next thing I knew, my upside break-even was breached and I was being forced to play defense by my This wouldn't have been a big deal except the day after I made the adjustment, I got the alert that EWY was going the following business day. To make matters worse, EWY was having a rally that week. I was completely trapped!

Due to the circumstances, I had no choice but to cut my losses. Had I kept the position, I would have been on my and been forced to pay a dividend that turned out to be almost twice the amount I expected it to be. Even the calls would have been an assignment risk on this one – a rare case in my experience. After going ex-dividend, EWY continued its beast of a rally. I closed out for an annoying loss, but doing so actually saved me from an even worse debacle so for that, I suppose, I am grateful.

Losing money always sucks but not all losers are necessarily "failures." Sometimes you put up a really good fight but the market just beats you. On the next page, we'll go over a couple trades that lost money but were battles well lost.