My first and greatest loss to this date in the stock market has been due to a call position I took on SWBI. SWBI is a company that many may avoid due to being in the gun trade. I am normally not one to look at these trades too often but the year we had, the uncertainty, the unexpected riots, it seemed that this would be a great opportunity for me to see what social arbitrage was all about. 

Let's start with my thinking on the social arbitrage opportunity for SWBI. During the summer time once a lot of protests were going on and once I began to see reports of violence and destruction of property I realized guns would become a topic. Add to that the fact that we were in an election year and that the markets were pointing to a Biden win and I thought I could get a good return on this specific trade. Gun sales were spiking, 

At the end of the day gun ownership definitely increased and Biden did win but the two factors that destroyed my chances were the longevity of the call, it was a short term hold that expired too quickly, as well as not taking into account the stock splitting from its outdoor segment which in now AOUT and how that would affect the liquidity of my calls.

So let me summarize the reason I lost money on this trade and let the contract expire.

1. I bought a short term call. I decided to play the run up to the election and got a contract that ended in October over one that ended in January post election.

2. I did not take into consideration a stock split which really brought down prices and took away some liquidity.

What I learned from this experience is the fact that I need to focus on the details. My conjecture was not wrong, I simply didn't give myself the proper time frame and did not have an exit point at mind when I exited the trade. It was an expensive learning experience but one I won't forget. I will try to find more details on my future trades, I use Robinhood and it does not have a lot of records if you don't screenshot your trades right away. The future should be better since I can screenshot current trades and focus on my experience with those.