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FOOL NOW HAS LIMIT ORDERs - CLOSE and OPEN -- COOL FOOL award.

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15

May 27, 2009 – Comments (12) | RELATED TICKERS: COOL , FO.DL2 , 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.

 

 

 

12 Comments – Post Your Own

#1) On May 27, 2009 at 7:40 PM, TSIF (99.96) wrote:

My cut and paste Hyperlinks seem to take you to the CAP's home page.

Here is the link to the help page, but it's also accessible from your make new picks links.

http://caps.fool.com/help.aspx#aboutlimits

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#2) On May 27, 2009 at 7:52 PM, TSIF (99.96) wrote:

Hmmm, testing an open. It looks like you can't use these on any picks you already have open.....too bad.... :)

Lower Close is admitting a loss.  Will try putting a higher value in the "lower close" than the Start Limit. 

Of course an Upper Close set higher than your Start does NOT mean that you will close positive. If the S&P goes up by 20% and your upper close is 15% from your open, (assuming an up pick), then you would still "lose" points and accuracy on the pick. 

It appears they are truly for "auto pilots", but are a change and a move toward a more realistic "broker" world.

I would suggest "new players" ensure they understand the accuracy model of CAPs if they are hoping for the best scores.  If you close a pick between Zero and PLUS 4.99999 (less than 5.0) you don't get any accuracy points. IF you close a pick even the least bit negative (- 0.01) you lose accuracy points.

This Limit Feature, does not ensure that you will close apick in the green at +5 or better if you use it.

Good luck.

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#3) On May 27, 2009 at 8:15 PM, awallejr (77.67) wrote:

This is a great change.

P.S.:  I want those tic tacs

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#4) On May 27, 2009 at 8:38 PM, ChrisGraley (29.74) wrote:

Love it and hope you make the player limit orders viewable by others. It would bring a whole new dimension to CAPS.

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#5) On May 27, 2009 at 8:45 PM, TSIF (99.96) wrote:

Warren Buffet Sweet Treats!  Put a Stock Symbol on the Back! :)

Have Crammer draw them out of a bag; Flip them in the air.

Buffet up, it's a buy, stock symbol up, its a sell.

He'd be much more accurate.

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#6) On May 27, 2009 at 8:45 PM, rhallbick (99.40) wrote:

I checked it out on a red thumb (under the new "limit tab") and it seemed to accept my $0.01 target OK.

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#7) On May 27, 2009 at 9:06 PM, TSIF (99.96) wrote:

Thanks Rhall!  I had missed the "new limit tab".  Way Cool! 

Also, MattH42004 noted in GMX's blog:

"One question... is it possible to use a limit to close a pick already open?"

 "It looks like it. There is a "Limit Orders" tab on your scorecard now. Just click on it and add limits to any pick thats been open for over seven days. At least thats how it appears to work, I haven't tried it yet. "  Thanks MATT

I did poke some numbers into a few of my picks. It's a little DANGEROUS.  Again, note my comments on how this does NOT assure you will earn Positive CAPs points (and accuracy).

Be very careful with the CLOSE Limits!  :)

 

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#8) On May 27, 2009 at 9:11 PM, TSIF (99.96) wrote:

Don't forget to click SAVE!  :)

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#9) On May 28, 2009 at 10:45 AM, Tagit (64.98) wrote:

Hi Tsif,

 

I’m in a bit of dilemma, (I’ve done my research) now I need your wisdom. Almost bought a huge chunk of “NM” this morning and just as I was pulling the trigger “my finger hesitated” then I saw the drop in “SBLK “ and thought this was a better choice to play. I think “SBLK” will rise to 6 or better and have more gains in the near term than “NM”. You have any advice MR. OZ. :)

 

Tagit

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#10) On May 28, 2009 at 10:47 AM, TSIF (99.96) wrote:

Hmmmm, careful this morning Fools.  I haven't had enough coffee yet, but it appears to me that the tic-tacs have some bugs in them.

My pending picks count is off.  The system closed my DIN even though it had only been open for two days.  My close limit on the down thumb was no where near where it closed.  So at least in this down-thumb case, either I don't understand the guidance or the bugs got my DIN.   I think DIN is full of bugs anyway!  

At either rate, I think our new feature needs more testing, or I need more caffine!!!!  :)

Happy tic-tacs 

 

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#11) On May 28, 2009 at 12:16 PM, MGDG (34.89) wrote:

TSIF, thanks for the heads up you posted on my blog. That's worth a Rec. They repaired my picks, so all is well in Fooldom. When it's working well I will be using it a lot.

As Chris posted above in #4, it would be great if other players could see your limit orders. It would be like a price target on the stock. It could also serve as a Stop Loss indicator. It would allow players to view what you see as a good entry price to open a pick.

 

 

 

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#12) On May 28, 2009 at 12:44 PM, TSIF (99.96) wrote:

Thanks MGDG!

Tagit, it's good sometimes to buy a stock when the market has beat it over earnings. The lower entry price appears to be a plus if you are long.

NM and SBLK are almost like twins.  SBLK has not been around as long and is smaller, with lower revenue generation.  If you overlay them in a one year or two year chart, they look like twins as well.   SBLK is a little bit more volitile.

While the lower entry might be good, I'd prefer the stability of NM and it's track record. You might want to read both's full quarter transcripts.  I like to listen to a call sometimes as well if it's archived.  You can "read" quite a bit into management from the tone. 

I'm long NM, and happy with my choice, but SBLK might have some better shorter term potential, but more volitity is not necessarily good.  NM's cash position should serve it well if the recession lingers. 

Good luck.

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