Sow My Seeds

SAFEGUARDING YOUR PROFITS

When a stock runs up into a high, we usually try to let it inch up more, but Catch 22! sometimes the stock reverses faster than we realise :(

We can safeguard our profits with a stop limit sell order using the SGX Advanced Order system. This order will safeguard our profits in the event an uptrending stock changes direction and drops. If you held Genting Sing shares during the Yr 2010 high of $2.25 , you would have experienced this, and perhaps wanted to kick yourself for not taking profits around that time.

Now, let's take an example of Comfort DelGro. Let's say, you own 5,000 shares of Comfort DelGro that you had bought recently at 2016 June's low of $2.63. After doing your sums, your breakeven price is around $2.65. Comfort DelGro is currently trading at $2.87, in which you are sitting on around $1,100+ of profits. You're aiming to sell Comfort DelGro at $3.00, but in the event that the stock turns, you intend to sell at (lowest) $2.70 to safeguard your profits.



By placing a basic order to sell 5,000 shares @ $2.70, your order will immediately be done at $2.87 (best buy price), which is not what you want!



In other words:

• Stop price is the price that triggers the order to be "live".
• Limit sell order is your usual sell order which is a sell order with a sell price specified.

Where to place an Advanced Sell Order?

Method 1. Right-click on Stock Name and select "Sell (Advanced)"

Method 2. Select "Advanced" on the Place Order page

How to place the Stop Limit Sell Order?

Referring to the Comfort DelGro example above, you would place the stop limit sell order this way:

In the above order, you have placed a sell order of 5,000 shares @ $2.70. This order will be placed when Comfort DelGro hits $2.71.

For easier understanding, I have placed the stop price at $2.71. This means, if Comfort DelGro had dropped to $2.71, the sell order of $2.70 would become "live". The order can be done at $2.70 or better.

As long as the order can be sold above $2.70, it will be done. Chances are, if Comfort DelGro has a ready buyer at $2.71, the order will be sold at $2.71 (the best buyer price in the market at that moment). However, if the share gaps down below $2.69, the order may not be done.

Do take note, as the validity is selected as DAY, orders not done by the end of the trading day will automatically expire.

Next, this is what you will see on your order book:


Once the order is successful, the Status will change to "F", meaning the order has been filled.

• A Good Habit: Placing Long-Dated Orders
• What's More Important Than Buying Stocks? Selling Them!