margin, or using leverage, at a 4-to-1 ratio. Thus, she could spend $1,000 and actually control $4,000 worth of stock. In return, she paid Westwood $40 in commissions and about $5 in execution costs, for a total of $45 per "round-trip" trade-that is, buying and selling a stock.
Some traders at Westwood made as many as 100 round-trips daily; Jones averaged far fewer-about 20. But even at that rate she was spending $900 a day in commissions. "Everyone around you is in and out," of the market so fast, Jones says. "But I realized how quickly the costs were accumulating."
In late 1998, Jones left Westwood Trading and began trading from home. She wanted "the freedom to do more position trading as opposed to day trading."
As a day trader, Jones says she usually held on to a stock for about 30 minutes before selling it. With position trading, she could hang on to the stock for a longer period of time, riding out brief bouts of volatility and staying ahead of commission costs. But Jones never really got a chance to try her hand at position trading. She called it quits before fully employing that strategy. "The worst part was deciding for myself that trading wasn’t right for me, at least not at this time," Jones says.
LIFE AFTER DAY TRADING?
Mentally, Jones knows she made a mature choice-and the proper decision. Yet she still finds herself "constantly wondering: did I give it enough time? And then feeling that I had the knowledge, the resources, but ultimately not the energy to do it anymore."
Jones is now at the point where, she says, she doesn’t want to pick up a financial newspaper or see the business news on television. "I became so consumed with it that I just crashed, especially given my own grave disappointment that it didn’t work out the way I wanted it to."
But a post-day-trading life has continued for Jones. And, most importantly, she is happy. Jones is expecting a baby in mid-August and plans to stay home with her child for some time. Still, when asked whether she would ever go back to day trading, she pauses to grapple with the question, and then answers truthfully: "I’m still asking myself that," she responds. "I don’t know."
Then she ponders further and adds: "I think that probably at some point I will get tempted to start doing position trading, but probably on a much smaller scale via E*Trade or something."
After all, Jones adds: "I’m still a bear — and I think the market is way overvalued."
How to get
into day trading
If you’re interested in learning more about day trading, there are a host of interesting and informative books and Websites on the subject. Here are a few recent selections:
Day Trading into the Millennium by Michael P. Turner (Mass Market Books, $62.95)
How to Get Started in