GM. This is Dumb Money, where your worst trade is someone else's content.
Today's harvest was bountiful. Three different asset classes. Three different people who were absolutely certain. Combined damage: $215,000.
One of them bought weekly options on a biotech stock two days before a safety pause shut the trial down. The company filed for FDA approval on the same drug for a different indication the same week. Same stock. Two headlines. One very bad outcome.
Here's what we've got today:
🏆 Loss of the Day - XENE calls bought 48 hours before a safety pause. $134K, gone.
📉 Casualty #1 - Reddit stock. Bought on margin. At the top. The irony writes itself.
⚡ Casualty #2 - Shorted natural gas before hurricane season. Nature wins.
📊 Today by the Numbers - The data on today's carnage. It is worse than you think.
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America Can’t Afford to Lose This Race. But at What Cost?
History is replete with examples of America committing enormous sums to battles it believed it couldn’t afford to lose.
The Cold War … the space race … the war on terror … and now the race for AI supremacy.
President Trump has repeatedly declared that “whoever wins AI, wins.”
And with China racing to dominate AI too, America has a strong reason to keep pouring more and more money into the fight.
But what if winning this race comes at an enormous cost to ordinary Americans?
AI has already wiped out thousands of jobs and threatens to eliminate countless more.
At the same time, the spending on data centers, chips and power infrastructure is exploding. And the scary part is that spending is being financed with a LOT of debt.
What happens if companies are forced to borrow hundreds of billions more to finance the buildout … and the expected returns fail to materialize?
And what happens if the consequences spill out of Silicon Valley and land on the shoulders of regular Americans?
Weiss Ratings Analyst Nilus Mattive believes a dangerous chain of events is already taking shape.
One that could threaten your job, your retirement savings and your purchasing power.
But he also believes there’s a way to prepare for the fallout … and potentially emerge wealthier on the other side.
LOSS OF THE DAY 🏆
Every day we crown one person who made the worst financial decision on the internet.
Today's winner had conviction. Had a thesis. Had 300 call contracts that expired worthless on triple witching Friday.
Here's the setup. A guy on r/options found Xenon Pharmaceuticals. Ticker: XENE. The company had just filed an NDA with the FDA for its epilepsy drug. Analysts were bullish. Price targets above $70.
He saw the NDA filing. He saw the momentum.
He bought 300 XENE $60 weekly calls expiring September 18. Total cost: $134,000.
Here's the thing. These were weekly options on a biotech with a pending Phase 3 update in a completely different indication. The NDA was for seizures. The Phase 3 was for depression. Same drug, different indications. Two different risk profiles.
On September 17, XENE announced it was pausing enrollment in its depression trials. Neuropsychiatric adverse events. The stock dropped 30% in two sessions.
His 300 calls went from $4.47 to $0.04. On September 18, triple witching day, they expired worthless.
$134,000. Gone in 48 hours.
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| What are weekly options on a biotech? Weekly options expire every Friday. They're cheap because they have almost no time value left. The tradeoff: if the stock doesn't move your direction before Friday, you lose everything. On a biotech with a pending clinical update, that's a binary bet - it either prints or it zeroes. There is no middle ground. |
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TODAY'S CASUALTIES 💀
Not everybody can be Loss of the Day. But these two gave it a real shot.
Let's run through the tape.
Casualty #1: The Meta-Loss
Here's the thing about buying Reddit stock. You find the DD on Reddit. You buy the stock because of Reddit. And then you watch it burn while scrolling Reddit.
u/frontpage_stonks bought 800 RDDT shares at $142 in May. On margin. The stock had just crushed Q1 earnings. Community moat. Ad revenue growth. AI licensing deals.
One problem: Google's AI search updates started sending less traffic to Reddit. The ad thesis cracked. The stock started sliding.
He held from $142 all the way down to $80. Five months. Zero sells.
The margin call hit on a Tuesday. Loss: $49,600. Plus interest on the margin loan.
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He's still on Reddit. Still reading DD. Some patterns are harder to break than margin calls.
Casualty #2: The Hurricane Denier
This one's quick because the market was not.
u/natgas_short_szn shorted 4 Henry Hub natural gas contracts at $2.88 per MMBtu. His thesis: mild hurricane season, post-summer demand fade, storage levels adequate.
Hurricane Maxine entered the Gulf of Mexico three days later.
Category 3. Direct hit on offshore production platforms. Natural gas spiked from $2.88 to $3.67 in four trading sessions.
He got margin called at $3.67. Final loss: $31,400.
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| How futures margin works: A natural gas futures contract controls 10,000 MMBtu. You don't pay the full value upfront - you post a margin deposit, usually a fraction of the total. But you're on the hook for the full move. A $0.79 swing on 4 contracts is $31,400 in real losses on what started as a much smaller deposit. |
He is now long natural gas. The man looked at the Gulf of Mexico and said "this won't happen again."
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TODAY BY THE NUMBERS 📊
We track the data because the data is funnier than anything we could make up.
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The correlation between conviction and portfolio destruction remains perfect.
We track it every day. Today's losers were all certain. One was certain about a drug trial he didn't understand. One was certain about a social media stock he found on social media. One was certain the weather would cooperate.
See you tomorrow. The numbers will be different. The behavior won't be.
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