Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Craig A who wrote (3079)	1/21/1999 7:12:00 PM
From: Steve Robinett	Read Replies (2) \| Respond to of 41369

Craig, You say, I feel, however, having no technical background, that maybe a stop limit may be in order here. Then commeth the tax man. You could always buy cheaper out-of-the-money puts as a form of traumatic insurance. If the puts expire worthless, the premium you paid was the price of insurance. If AOL tanks during the life of the option and you make on the options what you lose on the stock, the insurance policy paid off without having to sell and incur a tax liability on the stock (though you'd still have one on the option). Just a thought. Best, --Steve

To: Craig A who wrote (3079)	1/21/1999 7:25:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to 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