How you manage getting stuck in a halt

Discussion in 'Risk Management' started by cherubian, Apr 21, 2008.

  1. Just curious what some of the other equity traders do when they have a position on and it gets halted.

    In the past I have avoided news stocks, but may be looking at playing the news-driven stocks each day and will expect to get stuck in halts from time to time.

    Since I generally trade without hard stops, for news blowups first thing I do after noticing fast moving P&L is over-hedge my position with a highly correlated stock, then see if I can figure out how bad the news is and try to get out of my position at a decent price.

    Any other suggestions or ideas would be appreciated. Thanks.
  2. If I knew nothing about the stock, strictly trading off the chart and you're stuck in a trading halt. Close out or hold?

    The first thing I would do is know where you are in relation/days to option expiry (if the stock has options). Then make a determination of probability of equity hitting likely strike price, or closing in between two strikes.

    Options could drive the underlying.
  3. gimp570


    If you are in a stock when it gets are stuck in the stock until it starts trading again

  4. Don't have an overly large position in any one stock and then - assuming this is going against you - try and gauge how bad the news really is before you sell when it reopens; lots of times, there will be an overreaction.
  5. You can't. Imagine having 3k OF WCG on the long side before that hault...
  6. GGSAE


    I was in CTB not that long ago when it was halted....i just sat on my hands and waited for it to resume trading. I trade pairs and can hold some positions for a long duration, before you get into trading you have to quantify the risk to potential risk if you're in x amount of shares and it moves x% points against you relative to your account equity. I wasn't in a very big position so the move didn't have a major impact on my day's p&L.
  7. Tums


    Long term survivors ask a different question -- How do I NOT having to manage a position that can get halted.