A Young Hot Shot Finds His Calling as a Day Trader

For two glorious minutes, Achille Capecce, a 27- year-old recent college grad from a small southern town, was making almost as much as the world's most expensive soccer player, Christian Vieri. On a fine spring morning, the on-line day trader watched as his stock pick shot up, netting him 2.5 million lire faster than he could down his espresso. But he didn't stop there. With his stock-picking knack, he turned two million lire into 14 million lire – a 600 percent gain – in three months from March 15 to June 15. On Tuesday he was named the winner of the first-ever "Top Trader With Real Money"championship, a contest promoted by several financial trading and information firms. "I love this stock market stuff" he told Italy Daily in a phone interview while driving back to Termoli, in the southern province of Campobasso, where he lives with his parents, some of whose money he also invests. "I'm getting great results", he added. Indeed, his pool has grown another 150 percent in the three months since the contest ended, an impressive feat considering that the blue-chip Mib30 Index and the all-share Mibtel Index have both lost ground since March.It wasn't the first time he had won a competition between stock traders. But in previous contests, sponsored by local newspapers, only "virtual money" was used, and his gains were on paper. The "Top Trader" competition was sponsored by Directa, Italy's largest on-line brokerage and also the first in the world to allow clients to make trades via their cell phones; the financial weekly Borsa & Finanza; the newsletter LombardReport.com; the data firm Club di Borsa and VeroTrading, a Modena-based financial advisor that communicates with its clients by cell phone. Some 120 people signed on, all using similar low-cost accounts at Directa but with differing amounts of start-up cash. "Olimpic", the code name of the trader who came in second, racked up almost 30 million lire in capital gains on an initial base of 60 million lire. Olympic said he had plenty of free time to study the market's every move during the summer, as he repaired electric heaters for a living. Placing third was Domenico Asciutto, a teacher who also hails from Campobasso, and who pulled in a 46.3 percent rate of return. As the sponsors expected, all three winners represented what the companies hope will be the wawe of the future: a cadre of do-it-yourself financial planners with little or no formal training. None were professional traders, but nor were they the archetypal "outsider", the long-retired dart-thrower who got lucky.Mr.Capecce said he is hooked, and plans to take a job at VeroTrading. As the company communicates through cell phones, he said he might even move to Scotland to join a set of friends there and improve his English. "It doesn't matter where I live, as long as there's Internet access", he pointed out. A quick study, Mr.Capecce finished his degree in aeronautical engineering three years ago, did his mandatory military service – where he traded stock tips with colleagues – and went on to take a modest job in his home region of Molise. He lasted 15 days before succumbing to the urge of being a stock speculator. At first, he worked through his bank in Termoli, and read voraciously about market dynamics, technical analyses and sophisticated financial instruments. Soon he found that the managers at the bank were unable to keep up with his requests to exercise puts, calls and options. He turned to a computer he set up in his bedroom, and began perusing an ample array of real-time services – like Directa and Mediosim, which also offers options and futures – and information providers, including those of the contest sponsors, which include graphics, volume flows and instantaneous quotes. "On-line services are fast", he said, and costs are dropping rapidly, especially compared to managed fund services.Mr.Capecce is a momentum trader, making around 20 trades a day, and cashing out on most of them within half an hour. He keeps around 15 percent of his assets in cash, he explained, only to avoid getting stunned out of the game. And while he reads the financial dailies Milano Finanza and Il Sole/24 Ore, he reckons he could probably do without them. The main problem, he said, is that the Italian Stock Exchange is too small. He took fleeting positions in Italy's largest and most heavily-traded companies, such as Telecom Italia, Eni, Olivetti, Fiat an Assicurazioni Generali. He also played a few overseas indexes, like the Nikkei in Japan. He welcomed plans to expand Milan's Nuovo Mercato, designed for smaller companies and technology start-ups, saying it would be volatile but that "speculators will be able to do their thing". It wasn't always a breeze. Several times Mr.Capecce sat stunned as his net worth slump by a million lire in a matter of minutes. "You shouldn't come near this stuff without having understood the technical principles", he said. "But you also have to gain practical experience", he added. "You can learn a lot when you lose money".