What would you do if you were making 33% on a stock. Wait for the finance report or lock in the profit. Rimm
Answers
419 points
TeachMeMore answered one year ago …
I'm sure the more "options oriented" folks on this site could give better recommendations, but you might consider buying some puts as insurance. So if you own a stock at 100, it runs to 133, and you're worried about a big announcement, buy the puts somewhere near 133 and if the stock drops out from under you, your profit is pretty much locked in.
If the results are good and it soars, your options expire worthless and you only minimally increased your cost basis.
3680 points
MNSL answered one year ago …
It all depend what type of investor are you. In current market environment 33% return is a good return. If you are long term investor, if you see this stock is still undervalued, there is a huge potential and growth in next 05 years and other plus points it is better to keep your stock to take above average return. Even if market come down there will be good demand for quality stocks.
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265 points
MaverickInvestor answered one year ago …
The put option is a pretty good idea.
However simpler, cheaper (and with less upside potential) is just to stick in a stop-loss order. To borrow the above example, if you bought at 100 and it's now 133, put your stop in somewhere where you'd be happy with the result (125 for 25%?) but not too close so you'll be stopped out if the stock just dips (130+?)
427 points
larryat36 answered one year ago …
The stop loss is one way to do this, but if there is a big drop after reporting it will blow right through your stop loss, however your buying the put would give you much better protection to the downside.
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380 points
SirCrashton answered one year ago …
A word of caution about stop loss orders: if the stock price drops rapidly and blows through your stop, the order will eventually fill, but below your stop price. If you use a STOP LIMIT order and the price gaps down past that number, IT WON'T FILL UNLESS IT BOUNCES BACK TO YOUR LIMIT PRICE WHICH MIGHT BE NEVER.
The surest way to lock in your profit is with a put option as TeachMeMore suggests.
3970 points
EthanR answered one year ago …
I would take a long look at the chart of the stock to see if it is overbought, or if it still has room to go higher. Look at both the daily and weekly charts. If it seems to be overbought, especially on the weekly chart, you might consider taking half your position off the table, and leave the rest there.
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699 points
7million7years answered one year ago …
If you don't know the true value of the stock, you shouldn't be in it in the first place. If you DO know the true value, at the current price, is the stock still undervalued by at leats 20%? Are the 'Big Guys' still buying the stock or are they selling?
If you don't know the answer to the above, sell. If you don't want to sell (gambler!) then put in the PUT now because, as others have pointed out a Stop Loss won't protect you in the event that things turn nasty.
BTW: I love RIMM, and I think it is still undervalued as a long-term stock ... on the other hand, market valuations are still higher than historical, so this stock could go either way in the short/medium term. I'll still be hanging around as a long-term buyer.
379 points
dustbusterz answered one year ago …
I think EthanR has about the best idea here. you never want to get greedy , but then, if the stock is still looking good, you might want to take a little profit and keep some of your money on the table for further upside. using the profits to find that next darling stock ready for upside potential.a 33 % profit is respectable and you don't want to risk that , so take some profits off the table for now, look at the company and see where they are, you might just want to take everything off the table if things are changing from when you first invested .
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