CBOE and TSLA Fall

Vanessa — Fri, 09 Jul 2010 06:11:53 +0000

CBOE Holdings and Tesla Motors Fall

Most investors agree that making a decision on when to sell is much more difficult than deciding when to buy. Recently Tesla (NASDAQ: TSLA) and CBOE Holdings (NASDAQ: CBOE) have fallen from higher levels and have even broken their IPO issue prices. In uncertain markets like the one we are currently in, you have to think more like a trader than an investor. That means taking a 5 or 10% gain instead of holding and waiting for a home run. You can always re-enter the position at higher levels if you choose.

With penny stocks this proves to be even more difficult due to increased volatility and lower liquidity. Many traders take profits by selling one-quarter of their position at a time as the stock moves higher. Moving stops up as they take profits and usually leaving the last quarter of the profitable position on the board to look for a massive gain and generally using a stop at the entry price to protect the last piece. Others use the same strategy, but choose to liquidate positions in thirds. The latter strategy saves a little on commissions but increases risk.

Another strategy that is simple but a little more risky, is always selling half the position on a double in the stock. However, huge gains like these this happens less frequently. Although sometimes hot penny stocks take off so quickly we don’t have time to get out. They often fall faster than they spike. This is why we preach being prepared. Set a limit order in advance if you don’t have time to look at a screen. Keep in mind that these profits add up and will allow you to take more risk on the remainder of the position. This strategy doesn’t just apply to NYSE issues. It applies to penny stocks on the OTCBB and pink sheets too. Just make a plan on how to exit and don’t be too greedy. There are tens of thousands of penny stocks to trade and many of them are showing huge gains daily. Finding the right one at the right time is the tricky part.

CBOE and TSLA Fall is news brought to you by Penny Stock Explosion. We provide up to date current information for hot penny stocks and penny stocks which are primed for explosion.

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Tesla Price NASDAQ:TSLA Putting On The Brakes TSLA is a company that has a great CEO, a...

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Tesla Price NASDAQ:TSLA Putting On The Brakes

Vanessa — Fri, 02 Jul 2010 17:18:39 +0000

Tesla IPO and Its Wild Ride

Going into the long weekend, it seems that shares of Tesla (NASDAQ:TSLA) have come back to earth. IPO shares of TSLA were priced at $17 and surged to 30.42 on it’s second day of trading. A massive gain considering that traders had time to buy aftermarket shares under $18. Was a lesson learned here for investors who paid more than $25 ? Yes, I think so.

TSLA is a company that has a great CEO, a cutting edge product and has never had problems raising money despite being unprofitable. However, the saying “What goes up must come down” came into play on TSLA. It’s probably safe to say that some of the aftermarket buying came from buyers who have a legitimate long term perspective. These are investors who are investing with a horizon so long that makes paying a point or two higher almost irrelevant. But what was the short term trader thinking at $30 a share ? Buying TLSA for a short term after it’s huge run is a classic example of why it’s sometimes better to sit on your hands. While the company has tremendous potential, the market mechanics remain the same.

It doesn’t matter if it’s a blue chip on the NYSE, a mid-cap or an OTCBB issue. Smart traders will always take profits. The lesson learned here is not to chase stocks that have made huge moves in short time frames. Looking at charts and decreasing volume at the highs is key. This applies not only to TSLA, but to hot penny stocks too that are on the move.

Tesla Price NASDAQ:TSLA Putting On The Brakes is news brought to you by Penny Stock Explosion. We provide up to date current information for hot penny stocks and penny stocks which are primed for explosion.