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Agreed, agreed, agreed.
----- Original Message -----
Sent: Thursday, March 25, 2004 9:46
PM
Subject: Re: [sharechat] Short Selling
Conditions
Stop losses ...
Are an open advertisement to the buyer,
that sellers are in the market [at
fixed and observable prices], and
consequently, those with the capital and
resolve to do so, can drive
-down- a price position by selling, such that
stop losses are triggered in
succession, hence presenting an opportuntiy for
the perpetrator -to be the
acquiring party! Is it not conceivable that the
seller is also the
buyer?
IMO, the only good stop loss order is the 'mental stop loss' and
a 'hot
wire' to the market price. I for one would -Never- disclose my sell
price
[place a forward stop loss oder] prior to actually selling [in
stosks].
Forces greater than mine are sure to capitalise on my
vulnerability and
naieve disclosure otherwise.
In options, where it
moves quickly and in large %ages, a trailing stop loss
has merit. In
stocks, it's the lazy traders advertisement to cunning buyers
with the
wherewithall to create the price that allows them to acquire -your-
stock.
Think about it.
BAA
>From: "Cristine Kerr"
<criskerr@optusnet.com.au>
>Reply-To:
sharechat@sharechat.co.nz
>To:
<sharechat@sharechat.co.nz>
>Subject:
Re: [sharechat] Short Selling Conditions
>Date: Thu, 25 Mar 2004
17:23:55 +1000
>
>Hi Karyn,
>
>Many thanks for your
contribution.
>
>You've raised very valid points, especially
regarding stop losses - I agree
>with your
observation.
>
>Regards,
>Cris
> -----
Original Message -----
> From: Karyn W
>
To: sharechat@sharechat.co.nz
>
Sent: Thursday, March 25, 2004 2:19 PM
> Subject:
[sharechat] Short Selling Conditions
>
>
> Short
selling doesnt have much effect on a market as there are VERY
>strict
> conditions placed on such sales by the
stock market. It is not
>something
> that
everyone can do, even if they wanted to, unlike buying
shares.
> eg. only a limited number of companies can be
short sold, only a small
> percentage of their shares may be
short sold in any one day, sales must
> usually be settled
within 3 days, requirements for margin cover, etc
>...
> for more detailed information see the ASX
conditions at
> http://www.asx.com.au/markets/l3/ShortSales_AM3.shtm
>
>
Automatic stop losses are a more potent tool to put a market into
a
> spiralling decline, and indeed has been given as the
reason for the big
>"one
> day" market crashes that
have occured - ie. as the price falls,
>
pre-determined stop losses are triggered, the stock is sold
>automatically
> without human intervention, the
increased volume of sellers pushes the
>price
> down,
triggering more stop losses, and so on.
>
> Now that
people can set auto stop losses via online brokers, it will
be
> interesting if we see the same type of volatility in
the Aust markets as
>has
> been seen in the
US.
>
> Karyn
>
>
_________________________________________________________________
>
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to
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>
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>
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