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| From: | Mike Nelson <bb2345@ihug.co.nz> |
| Date: | Tue, 22 Aug 2000 12:39:58 +1200 |
If you find out I badly need some .... MN At 12:29 PM 22-08-00 NZST, you wrote: >Thanks Rhys but I think I am thinking of something different. I beleive you >can buy an insurance and once in place the if the price drops you cannot >lose more than the price you bought the insurance for. i.e If I now bought >this insurance for ROCOM now then the price could not drop below $1.40. What >is this called? Is there such a thing? How much does it cost? How long does >the policy last for? Thanks again >Sue > > >>From: Rhys Lewis <rhys.lewis@zivo.co.nz> >>Reply-To: sharechat@sharechat.co.nz >>To: "'sharechat@sharechat.co.nz'" <sharechat@sharechat.co.nz> >>Subject: RE: [sharechat] stop losses >>Date: Tue, 22 Aug 2000 12:27:52 +1200 >> >>Looks like we're all sleeping today. I'll answer this, although there >>seems >>to be a delay with my email, so someone's bound to have answered it >>already! >> >>A stop loss is simply a request you make to your broker. >> >>So for example if I bought some TEL @ $6.90, and I figure that I want to >>sell them again automatically if the price drops more than 10%, I would >>tell >>the broker to buy at $6.90 and to sell again if the price drops below >>$6.83. >>This is just a conditional sell order which you should be able to make >>without any cost. >> >>However if the price climbs above $6.90 you might want to adjust the stop >>loss order, so you would call the broker and crank it up a little, >>following >>the rise in the price, and eventually the stop loss will automatically sell >>for you once the share has risen and then started to fall. (sounds good in >>theory!) >> >>If you use an Internet based broker you can usually place conditional >>orders >>that don't even go through to the broker until the conditions are reached. >> >>So a stop loss is a safety net that you put beneath the share to prevent >>you >>from losing too much on the downside. The theory behind it is that your >>natural inclination is to sell as soon as you see a profit and to hang on >>for grim death if the price drops. This of course is an effective profit >>minimisation method. Using the stop loss cuts your losses short, and >>allows >>your profits to run. If rises and falls are equally likely, and you only >>exit on 10% falls you should win more than half the time. But reality has >>a >>way of laughing at statistics... >> >>The bottom line is that peaks are notoriously difficult to spot, and by >>definition are times of low liquidity, so they are hard to trade on. >>Selling over the crest is much easier. >> >>Rhys Lewis >> >>-----Original Message----- >>From: Sue McLellan [mailto:mclellan40@hotmail.com] >>Sent: Tuesday, August 22, 2000 11:22 PM >>To: sharechat@sharechat.co.nz >>Subject: [sharechat] stop losses >> >> >>Can anyone tell me about stop losses and how much they cost. I'm thinking >>it may be a good idea for ROCOM. >>________________________________________________________________________ >>Get Your Private, Free E-mail from MSN Hotmail at http://www.hotmail.com >> >> >>---------------------------------------------------------------------------- >>http://www.sharechat.co.nz/ New Zealand's home for market >>investors >>http://www.netbroker.co.nz/ Trade on Credit, Low Brokerage. Join >>now. >>---------------------------------------------------------------------------- >>To remove yourself from this list, please use the form at >>http://www.sharechat.co.nz/forum.shtml. >> >>---------------------------------------------------------------------------- >>http://www.sharechat.co.nz/ New Zealand's home for market >>investors >>http://www.netbroker.co.nz/ Trade on Credit, Low Brokerage. Join >>now. >>---------------------------------------------------------------------------- >>To remove yourself from this list, please use the form at >>http://www.sharechat.co.nz/forum.shtml. > >________________________________________________________________________ >Get Your Private, Free E-mail from MSN Hotmail at http://www.hotmail.com > > >---------------------------------------------------------------------------- >http://www.sharechat.co.nz/ New Zealand's home for market investors >http://www.netbroker.co.nz/ Trade on Credit, Low Brokerage. Join now. >---------------------------------------------------------------------------- >To remove yourself from this list, please use the form at >http://www.sharechat.co.nz/forum.shtml. > > ---------------------------------------------------------------------------- http://www.sharechat.co.nz/ New Zealand's home for market investors http://www.netbroker.co.nz/ Trade on Credit, Low Brokerage. Join now. ---------------------------------------------------------------------------- To remove yourself from this list, please use the form at http://www.sharechat.co.nz/forum.shtml.
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