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Re: The hardest part of investing
Old 08-27-2005, 02:56 PM   #21
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Re: The hardest part of investing

I sold almost half of my most "generously valued" position that I was getting spooked by. I would have sold the rest yesterday, but volume went to almost nothing and I wasn't desperate enough to sell to move the market in the stock. We'll see what next week bings.
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Re: The hardest part of investing
Old 08-27-2005, 04:21 PM   #22
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Re: The hardest part of investing

You could also apply many options strategies to protect a position, from the very basic, buy a "put" to various spread strategies. But, if what you said is true as far as the volume not being there and your trade size "moving the market" there is probably not much interest in options on the security.

It does bother me a bit that people always freak out that there is no way to protect a profit in a stock, when that's really the whole point of derivatives (outside of speculation!), isn't it?



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Re: The hardest part of investing
Old 08-27-2005, 04:59 PM   #23
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Re: The hardest part of investing

Quote:
Originally Posted by Olav23
You could also apply many options strategies to protect a position, from the very basic, buy a "put" to various spread strategies. But, if what you said is true as far as the volume not being there and your trade size "moving the market" there is probably not much interest in options on the security.

It does bother me a bit that people always freak out that there is no way to protect a profit in a stock, when that's really the whole point of derivatives (outside of speculation!), isn't it?
Actually, in the case of this particular stock, there are no options available. so there really isn't a way to protect a profit, short of selling.
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Re: The hardest part of investing
Old 08-28-2005, 11:11 AM   #24
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Re: The hardest part of investing

Then I agree with the other posters. Take as much off the table as makes you comfortable. If it's doubled, taking half is basically "playing with the house's money".
But, you also risk losing all of your profit.

Though if you got into the stock for a particular reason and feel that it still fits those characteristics, I might just apply a "stop loss limit order". If its very non-liquid, which is sounds like since no options, it could definitly gap below your limit price and never sell and you're left holding the bag.

Sounds like a risky, volatile play to me, I'd probably take some chips off the table!

In general I set stop loss limits when I purchase a stock so I don't have to watch it like a hawk, and get a big surprise next time I check my account. I feel buying securities without the stop loss order is a bit like being on a trapeze without a net

You probably know all this already, especially if you are dabbling in the (most likely) small cap illiquid arena of equities already, but who knows who else is reading?

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