FOOL NOW HAS LIMIT ORDERs - CLOSE and OPEN -- COOL FOOL award.
May 27, 2009
– Comments (12) |
RELATED TICKERS: COOL
, FO.DL
, OLN
FOOL NOW HAS LIMIT ORDERs
Noting this new feature, and being someone who travels with minimal internet availability, (third world countries), and someone who seems to get "burned" by setting picks to open/close when they seem to be the least favorable, (well that's one of my excuses and I'm sticking to it)..... I hereby award FOOL, the COOL FOOL innovation award. (Pending, proving it works!).
AND another COOL FOOL Award for trying to get innovative, whether the feature works correctly or not. :)
I will leave it to another Foolish FOOL with better skills to design an appropriate AWARD banner.
Below I have CRIBBED the help text on this new feature, so it's all in one place for me to print and digest, or as a reference for others.
My next question is whether they have patented the tic-tacks yet...another cool fool idea!
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What are limit orders? A limit order automatically opens or closes a pick when that pick passes a set price.
Start limits make picks when their price threshold is passed. When you make a start limit, you set a price target (e.g. $55) and a pick direction (e.g. outperform). Start limits behave differently depending on whether they are set to outperform or underperform. Outperform start limits open at a price lower than the one entered, and underperform start limits open at a price higher than the one you enter.
Close limits end picks when their price threshold is passed. You can set close limits for any active pick on your scorecard, and you can also set close limits when you make a new pick. Close limits come in two flavors: upper and lower. Upper close limits close picks at a price higher than the price you set, and lower close limits close picks at a price lower than a price you set.
An Example:
On January 1st, FOOL trades for $60. You enter a start limit of $50, a lower close limit of $25 and an upper close limit of $100. Your start limits page looks like this:
TICKER: START LIMIT: LOWER CLOSE LIMIT: UPPER CLOSE LIMIT:
FOOL $50.00 $25.00 $100.00
On February 1st at noon Jim Cramer hits the sad trombone button while talking about FOOL and the stock drops to $49.50. Your pick in FOOL will open, and your close limits page looks like this:
TICKER: START LIMIT: LOWER CLOSE LIMIT: UPPER CLOSE LIMIT:
FOOL $49.50 $25.00 $100.00
But then, on March 1st, FOOL announces the invention of The Investing Pill, a pharmaceutical guaranteed to increase your returns by 10%. Shares skyrocket. The stock jumps to $100.01, and your pick is ended. Your ended picks page looks like this:
TICKER: START LIMIT: CLOSE LIMIT: STOCK GAIN
FOOL $49.50 $100.01 102.02%
Well, suppose the Investing Pill was actually a Tic Tac painted to look like Warren Buffet’s face. So, if FOOL, instead of rising, had dropped to $24.99 on March 1st, your pick would also close, but your ended picks page would look like this:
TICKER: START LIMIT: CLOSE LIMIT: STOCK GAIN
FOOL $49.50 $24.99 (-49.52%)
Can I change my limit orders?
You can edit or remove any of your limit orders at any time. Be forewarned - changed limits won’t take effect for approximately 20 minutes, to prevent members from using real-time quotes to obtain an unfair advantage.
When are my limit orders active? Limit orders become active approximately 20 minutes after they are made. Close limits will not bypass the 7 day hold, though, so even if your price threshold has passed your pick may still be open.
What price will my pick start/close at? Picks open and close using the next trade price once their limit has been met, provided that price also meets the limit. This means if a stock trades once above your limit but then drops back below your limit, your limit will not trigger. This also means that if a stock suddenly rises significantly and your limit is triggered, your pick will get a price from after the rise.
Do I need to enter limit orders for my picks? No. Limit orders are a tool for players who want finer control about when their picks open and close, or who want to set boundaries on the points they will lock in or risk, but limit orders are not required to participate in CAPS.
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