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Online Share Trading

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Simon Warrant stop loss

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Henna
Occasional Contributor
Simon what would be the best way to manage your stop loss on warrants ? On a "call" it is easy to sell when reaching your target with the price on the rise (not the market maker buying I suppose) But when the price of the share is falling it is difficult to sell the warrant quick enough because of the batch size and the time it takes to " reset or have a bid by the market maker "even with large bids on the share. That renders your stop ineffective and the delay will cause you to pass your minimum acceptable price.
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SimonPB
Valued Contributor
Henna, it depends how quickly the market is falling (if you're long or rising if you're short). This is always an issue when the market moves with speed. My advice is use the matrix to determine the underlying price at which your warrant is stopped out. Then set an SMS alert on the underlying for this level, but maybe give youself a little bit of breathing room so you get the SMS a little before the stop level is hit.
Point is sometimes the market means you miss your stop, but you still need to exit when it's hit.
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