Please help with an exit strategy

AngleBroom · May 30, 2008

Admittedly I know very little about stock trading, and am learning the markets. I've learned a valuable lesson the hard way, I'm sure it hasn't only happened to me. Here's my situation:

I invested in a stock that has no future. I've lost 41% of my money so far, and if possible want to reduce it, but definitely lose no more than that- I'm done! If it goes up fine, but I've come to grips with the loss and won't take anymore.

What strategy do I use to get rid of this security on e-trade, and still have the potential to make a profit?

Thanks for any advice

Waz · Jun 1, 2008

If you don't mind sharing, what stock did you buy? There is no way to guarantee you can get some of your money back, but it may be wise to cut your losses now and sell whatever it is. Then you can regroup and come up with a strategy that won't hurt you as bad. Most good investors put in stops to avoid huge losses on any one security, so I would suggest that in the future. If you want a safer investment, you can look at iShares or Spiders. They specialize in certian areas of the marketplace, and don't fluctuate nearly as much as individual stocks. They can still make good returns if you catch on while they're hot.

AngleBroom · Jun 1, 2008

Thanks for the reply Waz. I guess I should be more specific. I was referring to the sell options. Found out Trailing stop is not one. I bought Nosof for 6.92 and wear the dunce cap for that one. Trades at 3.79
Is it Stop, Stop limit, or limit? I'm thinking it's Stop @ 3.74.
What will that do if I execute it? Can I still cancel it later if the stock rises or how does it work?
Thanks

joelatti · Jun 2, 2008

Yes that stock is toast for the short to intermediate term and possibly will fall more....Stop limit will sell X amount of shares if the stock falls to said price...Good way to stop the bleeding

SpreadDestroyerr · Jun 2, 2008

joelatti said:
Yes that stock is toast for the short to intermediate term and possibly will fall more....Stop limit will sell X amount of shares if the stock falls to said price...Good way to stop the bleeding

Stop loss orders are null and void if a big drop happens in after hours. I learned this the hard way and will never hold anything through earnings in a bad market due to this. After hours action usually =:hump: