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Strategies & Market Trends : Rande Is . . . HOME

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To: Jason W who wrote (4486)	3/22/1999 4:20:00 PM
From: Rande Is	Read Replies (5) of 57584

More sent in by friend on Stop losses. . . Once your "stop loss" price is reached (on the way down), your "stop loss" becomes a PURE market order. Thus, say you bought an I'nut at $50. It goes to $75 that day. You are confident that it will go up; but, you want to protect your "profit," so you put in a GTC (good-until-canceled) "stop loss" for $65. Your stock doesn't sink to $65 that day, so you go to sleep feeling that you have a guaranteed profit in your stock. !!!WRONG!!! As soon as your stock passes $65 on the downside, your "stop loss" is NOW a market order: thus, it will be filled as soon as you are first in line. If you happen to be "lucky" you will get your market order filled at $40, before your (now, former) stock soars to $110 later in the day (this is also known as MMs "clearing" yesterday's orders). XXX

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