Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Buy Stop Limit orders?
Date: Fri, 6 Sep 2002 22:24:45 -0400
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This is a multi-part message in MIME format. - ------=_NextPart_000_00F7_01C255F4.3451C330 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Nancy, a stop order converts to a market order (wherever the market is = then). A stop LIMIT order converts to a LIMIT order (again, wherever the = market is). So if the stop price is hit by a big gap, then the stop = order becomes a market, and naturally executes, altho at a price that = may be a real surprise. A stop LIMIT order, because it now is a LIMIT = order, may not execute if the market moved outside of the LIMIT range. Example: you find an absolutely perfect, classic, textbook cup and = handle. Can't find a single thing wrong with either the chart or its = fundamentals, even after exhaustive hours of due diligence (ok, I admit = it, I like to fantasize). You determine that the perfect pivot point is exactly $25.20, so you = enter a Buy Stop order at $25.30. Your friend, however, enters a Buy = Stop LIMIT order at Buy Stop $25.30, LIMIT $26.46 (5% over the pivot). = Shortly before the open, the company announces that it has accepted a = cash buyout at $29, and the stock gaps to that price (or higher, or just = under) as the shorts immediately cover. Your buy is executed at around = $29, and the best you can hope for is to sell at a breakeven, if you are = lucky cover transaction costs. Your friend's order never executes = because of the LIMIT and is able to simply cancel the order when the = news is discovered. Exactly the same thing can happen on a Sell Stop / Sell Stop LIMIT = order. A stop order means you take what the market gives you, and can be = triggered when the volume might have kept you out of the trade entirely. = A stop LIMIT order means you may never get an execution, but may have a = second chance to evaluate the situation, and change the order, or cancel = it entirely. As one further comment, many firms still will not accept Stop LIMIT = orders on NASDAQ stocks, especially if they are not very liquid. - ----- Original Message -----=20 From: NANCY POLCARO=20 To: canslim=20 Sent: Friday, September 06, 2002 4:10 PM Subject: Re: [CANSLIM] Buy Stop Limit orders? which is right? One says a stop order will always execute somewhere = even if it is not at the stop price( this is what I thought) and one = says the market can pass through the stop and it will never be executed. = They both can not be correct. Advice from the more experienced then I = please. Thanks again for the help nancy ----- Original Message ----- From: Dan Forant Sent: Friday, September 06, 2002 10:57 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Buy Stop Limit orders? A stop order, buy or sell will always execute (somewhere). A Stop = Limit order may not if the market blows up through the stop *limit*. DanF ----- Original Message ----- From: "david frank" <camelot.homes@charter.net> To: <canslim@lists.xmission.com> Sent: Friday, September 06, 2002 12:53 PM Subject: Re: [CANSLIM] Buy Stop Limit orders? > Warren, the bad thing about a stop order is that it is a secondary = order. A > broker doesn't have to execute it, thereby, you don't really have = any > recourse, if it is not executed, although the price of the stock was within > your price parameters. If the price of the stock is outside of your = stop, it > will not execute. dave > ----- Original Message ----- > From: "Warren Keuffel" <wkeuffel@xmission.com> > To: "CANSLIM list" <canslim@lists.xmission.com> > Sent: Friday, September 06, 2002 10:55 AM > Subject: [CANSLIM] Buy Stop Limit orders? > > > > I am curious (yellow) -- sorry, bad joke that will be undersood = only by > > those of a certain age, if no one "gets" it I will explain, if = asked -- > > > > anyway, back to the subject -- whether people here have used buy = stop > > limit orders to trigger a purchase if the price of a stock rises = above > > the limit price. You would need to use this with some sort of = manual or > > automatic scan for increased volume to make a good buy on a = breakout, > > but given the volume, seems like a buy stop limit order would help = one > > buy at the pivot point. Or not? > > > > Thanks, > > Warren > > > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_00F7_01C255F4.3451C330 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2719.2200" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY=20 style=3D"BORDER-RIGHT: medium none; BORDER-TOP: medium none; FONT: 10pt = verdana; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"=20 bgColor=3D#ffffff> <DIV><FONT face=3DArial size=3D3>Nancy, a stop order converts to a = market order=20 (wherever the market is then). A stop LIMIT order converts to a LIMIT = order=20 (again, wherever the market is). So if the stop price is hit by a big = gap, then=20 the stop order becomes a market, and naturally executes, altho at a = price that=20 may be a real surprise. A stop LIMIT order, because it now is a LIMIT = order, may=20 not execute if the market moved outside of the LIMIT range.</FONT></DIV> <DIV><FONT face=3DArial size=3D3></FONT> </DIV> <DIV><FONT face=3DArial size=3D3>Example: you find an absolutely = perfect, classic,=20 textbook cup and handle. Can't find a single thing wrong with either the = chart=20 or its fundamentals, even after exhaustive hours of due diligence (ok, I = admit=20 it, I like to fantasize).</FONT></DIV> <DIV><FONT face=3DArial size=3D3></FONT> </DIV> <DIV><FONT face=3DArial size=3D3>You determine that the perfect pivot = point is=20 exactly $25.20, so you enter a Buy Stop order at $25.30. Your friend, = however,=20 enters a Buy Stop LIMIT order at Buy Stop $25.30, LIMIT $26.46 (5% over = the=20 pivot). Shortly before the open, the company announces that it has = accepted a=20 cash buyout at $29, and the stock gaps to that price (or higher, or just = under)=20 as the shorts immediately cover. Your buy is executed at around $29, and = the=20 best you can hope for is to sell at a breakeven, if you are lucky cover=20 transaction costs. Your friend's order never executes because of the = LIMIT and=20 is able to simply cancel the order when the news is = discovered.</FONT></DIV> <DIV><FONT face=3DArial size=3D3></FONT> </DIV> <DIV><FONT face=3DArial size=3D3>Exactly the same thing can happen on a = Sell Stop /=20 Sell Stop LIMIT order. A stop order means you take what the market gives = you,=20 and can be triggered when the volume might have kept you out of the = trade=20 entirely. A stop LIMIT order means you may never get an execution, but = may have=20 a second chance to evaluate the situation, and change the order, or = cancel it=20 entirely.</FONT></DIV> <DIV><FONT face=3DArial size=3D3></FONT> </DIV> <DIV><FONT face=3DArial size=3D3>As one further comment, many firms = still will not=20 accept Stop LIMIT orders on NASDAQ stocks, especially if they are not = very=20 liquid.</FONT></DIV> <DIV><FONT face=3DArial size=3D3></FONT> </DIV> <DIV style=3D"FONT: 10pt arial">----- Original Message -----=20 <DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20 title=3DZILLAGIRL@msn.com href=3D"mailto:ZILLAGIRL@msn.com">NANCY = POLCARO</A> </DIV> <DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20 href=3D"mailto:canslim@lists.xmission.com">canslim</A> </DIV> <DIV><B>Sent:</B> Friday, September 06, 2002 4:10 PM</DIV> <DIV><B>Subject:</B> Re: [CANSLIM] Buy Stop Limit orders?</DIV></DIV> <DIV><BR></DIV> <DIV>which is right? One says a stop order will always = execute=20 somewhere even if it is not at the stop price( this is what I thought) = and one=20 says the market can pass through the stop and it will never be=20 executed. They both can not be correct. Advice from the more = experienced then I please. Thanks again for the help nancy</DIV> <DIV> </DIV> <BLOCKQUOTE=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt Arial">----- Original Message -----</DIV> <DIV style=3D"BACKGROUND: #e4e4e4; FONT: 10pt Arial; COLOR: = black"><B>From:</B>=20 Dan Forant</DIV> <DIV style=3D"FONT: 10pt Arial"><B>Sent:</B> Friday, September 06, = 2002 10:57=20 AM</DIV> <DIV style=3D"FONT: 10pt Arial"><B>To:</B> = canslim@lists.xmission.com</DIV> <DIV style=3D"FONT: 10pt Arial"><B>Subject:</B> Re: [CANSLIM] Buy Stop = Limit=20 orders?</DIV> <DIV> </DIV>A stop order, buy or sell will always execute = (somewhere). A=20 Stop Limit<BR>order may not if the market blows up through the stop=20 *limit*.<BR><BR>DanF<BR>----- Original Message -----<BR>From: "david = frank"=20 <camelot.homes@charter.net><BR>To:=20 <canslim@lists.xmission.com><BR>Sent: Friday, September 06, 2002 = 12:53=20 PM<BR>Subject: Re: [CANSLIM] Buy Stop Limit orders?<BR><BR><BR>> = Warren,=20 the bad thing about a stop order is that it is a secondary = order.<BR>A<BR>>=20 broker doesn't have to execute it, thereby, you don't really have = any<BR>>=20 recourse, if it is not executed, although the price of the stock=20 was<BR>within<BR>> your price parameters. If the price of the stock = is=20 outside of your stop,<BR>it<BR>> will not execute. dave<BR>> = - -----=20 Original Message -----<BR>> From: "Warren Keuffel"=20 <wkeuffel@xmission.com><BR>> To: "CANSLIM list"=20 <canslim@lists.xmission.com><BR>> Sent: Friday, September 06, = 2002=20 10:55 AM<BR>> Subject: [CANSLIM] Buy Stop Limit=20 orders?<BR>><BR>><BR>> > I am curious (yellow) -- sorry, = bad joke=20 that will be undersood only by<BR>> > those of a certain age, if = no one=20 "gets" it I will explain, if asked --<BR>> ><BR>> > = anyway, back=20 to the subject -- whether people here have used buy stop<BR>> > = limit=20 orders to trigger a purchase if the price of a stock rises = above<BR>> >=20 the limit price. You would need to use this with some sort of manual=20 or<BR>> > automatic scan for increased volume to make a good buy = on a=20 breakout,<BR>> > but given the volume, seems like a buy stop = limit order=20 would help one<BR>> > buy at the pivot point. Or not?<BR>>=20 ><BR>> > Thanks,<BR>> > Warren<BR>> ><BR>>=20 ><BR>> > -<BR>> > -To subscribe/unsubscribe, email=20 "majordomo@xmission.com"<BR>> > -In the email body, write = "subscribe=20 canslim" or<BR>> > -"unsubscribe canslim". Do not use = quotes in=20 your email.<BR>><BR>><BR>> -<BR>> -To = subscribe/unsubscribe, email=20 "majordomo@xmission.com"<BR>> -In the email body, write "subscribe = canslim"=20 or<BR>> -"unsubscribe canslim". Do not use quotes in your=20 email.<BR>><BR><BR><BR>-<BR>-To subscribe/unsubscribe, email=20 "majordomo@xmission.com"<BR>-In the email body, write "subscribe = canslim"=20 or<BR>-"unsubscribe canslim". Do not use quotes in your=20 email.<BR></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_00F7_01C255F4.3451C330-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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