Jay, absolute rules for any trading situation are not prudent. Many time I have seen clients and traders give me orders to buy some stock that is 10 x 10 1/16. They want to buy 2000 at 10. I try to explain that the stock looks strong and that they should just pay the 1/16. No...they want it at 10, sometimes. Sometimes, they get it at 10, congrats! Sometimes they miss it and the stock goes to 18 in a few months.
Look, once you decide to bid 10, you will get it if it weakens! You wanted it, you decided it was worth it, now get the stock. A 1/16th shouldn't make the difference as to whetheryou want in or not. Most of the time, people dothis because they aren't quite sure and would probably rather not own it as readily as they would own it. If that's the case, BUY SOMETHING ELSE> Plenty of stocks out there, buy the ones you really want.The most you could save is the 1/16 x 2 or 125 bucks. Not that the 125 isnt a lot, but its being penny wise and pound foolish if the stock goes to 18 and you don't own it.
I am in no way saying to try to save the 1/16. I would never suggest not attempting it. How I would handle it wouldbe to at least tell your broker/trader/firm to set you up with soes, superdot (whatever) at 10 1/16, to pay the 1/16th if it gets stronger, but to keep bidding on selectnet or by displaying the bid at 10.
Regards,
Steve@yamner.com |
