Page 1 of 1
Trading Strategy
Posted: December 15th, 2006, 11:41 am
by orangeman44
I picked a stock based on fundamental analysis. My target was 60. I bought some at 29, then at 30 and 31. It went to 37 but I did not sell any. It dropped all the way to 26 and I bought some more. Then it went slowly back to 40; again I did not sell any. The stock is trading at 46. I made a lot of money but I could have made much more if I traded it more. With a target price so much higher, I have difficulty in selling but if I dont sell it when it rises, I cannot buy more when it drops. Any suggestion?
Trading Strategy
Posted: December 15th, 2006, 11:45 am
by Marine
Options
Trading Strategy
Posted: December 15th, 2006, 11:56 am
by orangeman44
Buy call options and delta hedge?
Trading Strategy
Posted: December 15th, 2006, 4:19 pm
by Lepperbe
really convinced it'll reach 60 within a set time frame?buy calls58 and sell calls60
Trading Strategy
Posted: December 15th, 2006, 5:04 pm
by orangeman44
Those options are not listed. Some of my stocks don't have options. I don't want to lose all of them even if hits 60.
Trading Strategy
Posted: December 17th, 2006, 9:00 pm
by farmer
Why do you expect it to drop? And if you do, then why not sell everything?As volatility rises relative to expected profit (as expected profit drops), you should unload.Also, assume there is a 10% chance you have any idea what you are talking about, and a 100% chance it would have gone up if you do. So it has a 55% chance of going up. And when it does go up, the chances you have any idea what you are talking about have risen to about 20%, right? So you should buy more... Hmmm, that can't be right, lol...
Trading Strategy
Posted: December 17th, 2006, 9:32 pm
by Traden4Alpha
I'd consider three questions:1. Is your price target really still 60 after all that's happened? The stock has obviously done some unexpected things which suggests that you might be totally wrong about the price target.2. Are you over-weight in the stock? You've bought this stock 4 times when you, presumably, had originally intended to buy once. Do you really think it's wise to have so much of your assets in this one stock? Even if you still expect it to go to 60, if you can conceive of it dropping (you obviously can), then you should not own too much of it.3. Are there no other stocks that are as or more attractive than this one? If you sell some of this at 46, and buy something else and that something else doubles in value, you'll be glad that you reduced your holdings of a stock that might only go up another 30%.Remember, you're not married to this stock.