Excuse me if I seem a little excited or rushed through this post. You guys will probably see why I am so pumped up by the end of this article. Essentially I am going to share how I completely screwed up on my part, yet still managed to make 30% or nearly $900 in just one day with MER.
It all started Sunday night when I read about Bank of America (BAC) to buy Merrill Lynch (MER). Like most people I jumped at putting an order in for the morning to buy 200 shares of Merill. Obviously I was betting on the fact that the stock would jump to the value it was supposed to be bought at.
With these type of buyouts, unless you are already in the stock then it is a very slim chance that you will get in before the price spike; however, like we all know Monday wasn’t exactly the best day for a spike. The DOW plummeted 500 points.
As I expected the Monday morning came and the price spiked, which caused me to not get into the stock. Later on into the day, I decided to cancel my order for Merrill and put in an order for another stock. I logged out and continued my day.
With TD Ameritrade, whenever I make a trade I get an email on my phone saying I can check my trade confirmation. It doesn’t show you what stock it was, but it just gives you a link. I assumed it was just the second stock I had put in an order for that day. I went to sleep and then carried on throughout Tuesday.
Unless I am making a trade I don’t normally log into my account, but for some reason I just had an urge to look at it. WOW!!
Once you log onto TD Ameritrade, the first thing you see is a pie chart of your allocations, and to my big, big, huge surprise I saw a portion of the pie filled with MER or in other words Merrill Lynch!!!
How did this happen? If we go back and look at the stock’s movement we can sort of figure it out.
My order was originally set for a limit of $18. On Monday the stock spiked above that before my order could go in, and apparently I had completely forgot to cancel my order for Merrill. By Monday’s closing the stock had come back down below $18. So that trade confirmation email I had received in the night wasn’t for my second stock order, but for Merrill Lynch.
Bring in Tuesday. The stock spiked and in comes the 30% return and nearly $900… by mistake. Woohooo!!!
Summary
- I forgot to cancel order for MER, which went through Monday afternoon.
- Monday night I received an email notifying me that my trade had went through. I thought it was for another stock I had put an order for.
- Tuesday night I log into TD Ameritrade and notice the big surprise that I had indeed cashed in on the Merrill Lynch buyout.
Now I have set an order to sell if the stock comes below $22, so lets see if we can push a little more out of this mistake.
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