[sevensa]

Originally Posted by AbeSmith »

But in index futures if your instrument gets halted you can hedge your position by trading in another similar instrument. This can't be done with a stock that is halted on stock specific news.

Why can't you do the same thing with a stock? You can hedge it with another stock in the same industry, or with a ETF. Bottom line, trading has risks. If you are not comfortable with the risks, then don't do it.

[AbeSmith]

Originally Posted by sevensa »

Why can't you do the same thing with a stock? You can hedge it with another stock in the same industry, or with a ETF. Bottom line, trading has risks. If you are not comfortable with the risks, then don't do it.

You can't hedge a stock if the news that caused it to halt is stock specific. Then you are stuck with a day trading position on a halted stock, the stock reopens against your position, and you had no way to hedge against it. What if that stock reopens 5% against your day trading position that is designed to take less than 1% loss? Your stop loss will get filled at that 5% level because it gapped up against you, not at the .3% where you placed your stop loss. Could it reopen 10 or 20% or more against you?

That's why I asked thales if he knew how badly a halted stock can open against your position. Probably he doesn't know or is not saying for some reason. So yeah, ofcourse I'm not comfortable with trading stocks if I don't know this important information, which thales failed to answer, and you are not helping to answer, but instead giving me ultimatums that I should not trade stocks if I'm not comfortable with the risk. Well that's what I'm trying to find out. And I wonder why thales thanked your stupid ultimatum reply to me? Very fishy of thales.

[sevensa]

Originally Posted by AbeSmith »

You can't hedge a stock if the news that caused it to halt is stock specific. Then you are stuck with a day trading position on a halted stock, the stock reopens against your position, and you had no way to hedge against it. What if that stock reopens 5% against your day trading position that is designed to take less than 1% loss? Your stop loss will get filled at that 5% level because it gapped up against you, not at the .3% where you placed your stop loss. Could it reopen 10 or 20% or more against you?

That's why I asked thales if he knew how badly a halted stock can open against your position. Probably he doesn't know or is not saying for some reason. So yeah, ofcourse I'm not comfortable with trading stocks if I don't know this important information, which thales failed to answer, and you are not helping to answer, but instead giving me ultimatums that I should not trade stocks if I'm not comfortable with the risk. Well that's what I'm trying to find out. And I wonder why thales thanked your stupid ultimatum reply to me? Very fishy of thales.

You seriously expect anyone to be able to tell you exactly how much a stock can trade against you when halted? Really?

BTW, this was not an ultimatum; Just common sense...

[brownsfan019]

Originally Posted by AbeSmith »

What about this scenario: A stock moves on heavy volume based on a false rumor, you place a day trade, but stock is halted, and you have no way to hedge your position. Then the real news comes out and stock reopens against you, triggering your stop, but at greater loss than you planned for. I wonder how bad could this loss be? Could it reopen 20% or more against you? That would be a huge loss if you have a day trade in place. Even 5% could be huge. Do you look into the fundamentals of a high volume move to see, for example, if it is based on a rumor or fact?

The point is Abe is that you CAN hedge your position. Sevensa told you how - you can buy/short similar stocks or a market ETF or a market futures contract.

So let's say you are short RIMM and it halts. If you are panicked, you could go long the NQ, long a Nasdaq based ETF or a stock similar to RIMM. Is it perfect? Probably not but there are options to hedge the position.

Same thing if the CME goes down (which a few years ago was happening routinely it seemed) - you could hedge w/ an ETF, but it won't be perfect either.

[AbeSmith]

Originally Posted by brownsfan019 »

The point is Abe is that you CAN hedge your position. Sevensa told you how - you can buy/short similar stocks or a market ETF or a market futures contract.

So let's say you are short RIMM and it halts. If you are panicked, you could go long the NQ, long a Nasdaq based ETF or a stock similar to RIMM. Is it perfect? Probably not but there are options to hedge the position.

Same thing if the CME goes down (which a few years ago was happening routinely it seemed) - you could hedge w/ an ETF, but it won't be perfect either.

Nonsense. One reason people trade ETFs is to protect against company specific bad news. So they buy the whole sector incase the specific stock has some bad news. If youre trading that stock and it gets halted, the ETF will not be a good hedge.

But with index futures they indexes follow eachother very closely. If one index is down you can either buy the etf, or a similar index. That's a much better hedge than buying the sector of a stock that got halted on stock specific news.

[Tams]

Lol .......... ..........

no, you cannot hedge company specific news.
but you can hedge...
if you chose not to hedge,
or if you decided that nothing is good enough as a hedge,
then do like s said... don't trade,
which is what you have already stated anyway...
that's the decision you have made,
and that's the decision i have made too...
great!
we are all in agreement

[AbeSmith]

Originally Posted by sevensa »

You seriously expect anyone to be able to tell you exactly how much a stock can trade against you when halted? Really?

BTW, this was not an ultimatum; Just common sense...

No. YOu seriously believe I expect to know exactly how much a stock can trade against me when halted? All I asked was CAN it reopen 5%, 10%, or 20% against me? That is what I, and anyone with common sense, which you obviusly lack, should know before they risk their money on day trading stocks.

Yet the only replies I got so far from you is, don't risk your money on stocks if you're not comfortable with the risk. I'm trying to figure out the risk. How much CAN a halted stock reopen against me?

It is in bold now to help. But obiously you are just a troll and don't know the answer, so don't waist peoples time with your stupid replies. And thales clearly either doesn't know is avoiding the question.

[AbeSmith]

Originally Posted by Tams »

Lol .......... ..........

no, you cannot hedge company specific news.
but you can hedge...
if you chose not to hedge,
or if you decided that nothing is good enough as a hedge,
then do like s said... don't trade,
which is what you have already stated anyway...
that's the decision you have made,
and that's the decision i have made too...
great!
we are all in agreement

I'd like to know how severly can a halted stock move against me when it reopens. And anyone with even half a brain should be wondering the same thing. Technically it can move 100% or more against you. That is not what I'm asking. I want to know, has anyone seen a halted stock reopen 5%, 10%, or 20%? What if you got a day trade on a stock, it gets halted, and reopens against you that much, that would be a huge loss if you only plan to lose .3% for example. And that is very scary thing about stocks so I'm trying to figure out how likely is that, and are there ways to protect against it.