Back in the old days when each NYSE stock had a specialist that made the market, there was a financial guru, Richard Ney (A former actor) whose whole schtick was to rail against the specialist.
At one time I was thinking about being a stock broker, but got blown out on Black Monday 1987 and never bought another stock again. http://en.wikipedia.org/wiki/Richard_Ney Anyway, his theory was that if you put in stop losses, the specialist would see that, move the market lower, buy up all the stops and then send them back up. It's a dirty, dirty business. --- On Fri, 5/7/10, Publius Maximus <[email protected]> wrote: > From: Publius Maximus <[email protected]> > Subject: Re: [OT] Wall Street Meltown > To: "ProFox Email List" <[email protected]> > Date: Friday, May 7, 2010, 7:01 AM > Unless all transactions are voided > during the period of the collapse, > my father is going to lose all his financial planning > clients. > > He had stop losses set for all of the accounts. A > representative > example: One of his clients had tens of thousands of > dollars at > $61/share in one of a few ETFs he has been selling. > > He had set a stop loss of $59/share, thinking that would > protect his > clients from major downside risk. > > Unfortunately the ETF dropped briefly to near zero and > bounced back > up. So, the stop loss was triggered but all his client's > shares sold > at $0.15/share. A 60K account became a couple hundred > dollars in 20 > minutes. > > Somebody bought those shares at $0.15/share. And reaped the > immediate > bounce back in price. > > If you don't believe me, look at this chart: > > <http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=RFG&sid=0&o_symb=RFG&x=0&y=0> > > You could type in almost any ETF symbol and the picture > would be the > same. Try RWL or QQQ. QQQ only went down briefly to half > its value. > > Notice the perfectly vertical line near the end, the > horizontal line > at the very end, where it closed. > > That was just one of dozens of cases, where a stop loss > became a total > loss in mere moments. It would have been better if he had > no stop loss > on those accounts, but then these conservative middle class > investors > would not have been comfortable taking positions in the > market. > > Now THAT'S how you "spread the wealth around"! > > - Publius > > On Thu, May 6, 2010 at 3:00 PM, Michael Madigan <[email protected]> > wrote: > > No need to fear, the Kenyan is here! > > [excessive quoting removed by server] _______________________________________________ Post Messages to: [email protected] Subscription Maintenance: http://leafe.com/mailman/listinfo/profox OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech Searchable Archive: http://leafe.com/archives/search/profox This message: http://leafe.com/archives/byMID/profox/[email protected] ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
