Most memorable investment in 2022 - ESSC

My most memorable investment is also my last investment in 2021 and my first investment in 2022, $East Stone Acquisition Corp(ESSC)$

It started in Dec 2021 when ESSC gathered tons of interest as a "gamma squeeze" candidate. 

All the hype about "short squeeze" and "gamma squeeze" after a successful squeeze in GME and AMC coupled with rise of "SPACs".

Only the first ever squeeze is real, any subsequent ones spotted by retailer investors, are also easily spotted by market makers and resolved before it can happen.

Now, for the whole story, here is what happened in 2021/12/14:

On the week of options expiry (OPEX), it suged to 26.27 at the peak. This is known as a "gamma squeeze" where gamma is high for options in the last week of expiry and options sellers have to buy huge volumes of underlyings to hedge their short positions when the price grows and more options go in-the-money (ITM). Another factor would be that SPACs have a small float and having a small float is a prerequisite for squeezes. 

Made a small amount of money on this run. Decided to jump on it again in Jan 2022 when the setup is still present for options expiring that month and another gamma squeeze may play out.

Here is what happened on 2022/01/18:

Was holding CALL options and hoping to close most of them at a surge, but the surge never came this time. It drifted slowly up to 15.89 and dropped to lowest 10.92 in a matter of couple hours. 

The whole saga brought the portfolio to -40% to start 2022... 

Slowly climbing out of the hole but it was a rough fall. 

Lesson learnt would be how real the Dunning-Kruger Effect is. 

This process happens almost every time when learning something new. But this is specially noticeable when learning how to trade as the results of trading is well tabulated in the form of a P/L chart... Coincidentally the P/L chart of a newbie trader to a consistantly profitable trader will look similar to the Dunning-Kruger graph.

From good profit to overconfidence to a big loss to eventual enlightenment, the key is to never give up, to learn and improve continuously.

The remainder of 2022 would be about better risk management and slowly climbing out of the "Valley of Despair" towards the "Plateau of Sustainability".

Thanks for reading and hope this lesson lessens the fall for some.