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Technology Stocks : America On-Line (AOL)
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To: Craig A who wrote (3079)1/21/1999 7:25:00 PM
From: Chuzzlewit  Read Replies (1) of 41369
 
Craig, stop orders are a terrible strategy for a volatile stock. The price swings you see are due to a lot of day traders and momentum players bouncing off the walls. When I came on this thread I warned my fellow posters about the concern I had: the nature of the people "investing" in AOL. Momentum investing is a fool's game, and placing stop losses plays right into that game. The reason is that once your stop loss price is breached your order becomes a market order. So, let's say that you put in a stop loss at $130, but the price gaps down to $120. Your shares will be sold at market -- not at $130. This behavior of stop losses has fooled a lot of people. My suggestion to you is to simply sell if you are worried about the stock price, or consider buying a protective put.

Good luck,

TTFN,
CTC
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