Whats the best way out of a tanking position?

There really is no one onswer to this question.

Every situation is different and will provide you with different means of getting out.

The overall planning of the trade is the important part, not necessarily the routing. Besides, if you are going to trade large positions, there will seldom be any size to get out of on the ECN's(depends on the stock of course) especially if a stock is collapsing, and NX'ing is only good for the first thousand. Also, usually, the specialist will only show a 1 on the bid which will prevent anyone from NXing.


It comes down to: do you think the stock is going lower, if so sell it market. Do you think the stock is near a bottom, maybe wait. But that is were it gets tricky and dangerous because rarely does anyone ever know where the true bottom is.
 
Quote from CONTRARIAN:





must have exit strategy prior to trade execution!

unfortunately that would be poor trading. :(
if one lacks the appropriate prepartion before hand you are merely reacting to noise and random volatility.
price movement can not be predicted but rather planned for and thus predetermined by planning ones escape rout prior to trade execution.

be smart. trade better.make money.
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You lost me;

"must have exit strategy prior to trade execution!
unfortunately that would be poor trading."

Why is an exit strategy poor trading?

"if one lacks the appropriate prepartion before hand you are merely reacting to noise and random volatility."

I would not consider a position as "tanking" unless it has surpassed random volatility and is moving against me beyond what I had predetermined as acceptable.
 
Quote from ChaosNSX:

LOL

I'll eventually switch to futures.. When the equities dry up.

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when equities dry up? Pls open your eyes first ..Sell/Cover ..then ..

consider:

NTES 69 to 40
JBLU 69 to 52
WM 37 to 46
PNRA 44 to 40
MRK 42.25 to 46
PFE 30 to 34ish
CFC 66 to 108

Do some homework; and don;t worry about the loser's ( I have many) ..cut em quick. And move on ...5000+ stocks to work with ..no need to get hung up on being right all the time in one.

I was SS WFMI overnight (+6 today) ..covered on first print...Was wrong ..F%^%ck it. No biggie. Who cares? ..move on..

Best,
David
 
I like to sell my long take out a bullet and smack the stock... this usually winds up in my favor however don't PANIC out be focused young grasshopper
 
Just stop, turn to your left, ask the person sitting next to you what to do, then follow his instructions!!! This person is likely an elite trader!
 
Thank you, I find your posts insightful as well.

Quote from ortega:

Just stop, turn to your left, ask the person sitting next to you what to do, then follow his instructions!!! This person is likely an elite trader!
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Quote from Cutten:

Place a limit order a fair but not stupid amount beyond the bid or offer. This gets you out quick without risking a terrible fill. The exception is major spikes on surprise news etc where you should just get out at the market.
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I agree with the first part of this. When I'm in a position with any kind of size, and I've decided that I want to get out...sooner rather than later... I'll cross the bid or ask as Cutten is describing. However, I break up the order into smaller pieces and scale them, sometimes looking at ECNs for those smaller pieces.

I've never used a Market order to exit a stock. Maybe that's limiting (pun intended) my options, but I've heard too many horror stories. I'd rather have the stock print beyond the limit orders I've sent, and try to trade it on a rebound. Sometimes, I've had a stock print beyond my limit and almost immediately bounce back and hit it. (Gee, I wonder "who" is making money there???) It seems that Market's are not only guaranteed executions, but also guaranteed worst executions.

Of course, it really depends on the stock and how thick the book is on average. Some stocks, like GE or C, a market order is going to get filled more fairly than in something with less liquidity and more volatility, like a WLP. And knowing your few stocks really helps too. You might know that yours always retraces after a hard move. Heck you might even be fading it and adding to your position.....
 
Quote from ortega:

Just stop, turn to your left, ask the person sitting next to you what to do, then follow his instructions!!! This person is likely an elite trader!
More...
Quote from ChaosNSX:

Thank you, I find your posts insightful as well.
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LOL Chaos! :D
 
A couple of small points.

Things are usually orderly. The tanking you speak of is not too familiar to me.

Anyway. If I decide to exit, it usually comes as a planned thing when the trade doesn't procede. This is like tanking I believe.

I use market exits always and spread them out by not exceeding two things: the normal size block showing on the T&S and not pushing more than 10% of the cummulative net volume traded so far in the session.

If it were today, then the am inverted V would have been the first clue as when to begin to get out. Leave before the downside started. If through that stuff thetrade procededs, then the midday inverted saucer probably would have taken hold at come point. when it did to stall cause the trade to stall, I would have just gotten up to 10% asap and then held the exit to the 10% as close as possible until I got out.

There is no chance, probably that and good traes were still in the market today after the saucer began toaccelerate.

I know from your Q that you do not get caught getting stopped out. I always keep thorough notes on how each stock has excentricities that precede trades becoming messy. I have a term for them: flaws. Tanking, as a flaw, would not allow me to own it, if you mean sudden intraday moves on illiquid situations. I work the turf where I get the benefits of high Beta and not the drag of large floats. Stocks that are not of high quality scare me to death. If I see anything really flashy within 6 months of my potential buy I cross the stock off my list. I am a "chicken' trader at heart.

I have an orientation to timing and not to price. If something wafts into the space that is unseemly; then it is time to do the deed as a series of market partial fills and not unbalance the market volume flow. Volume pertibations marr the price flow.
 
Everything is going to depend on the market and quote with the stock. Since there is limited info on what you're trading or the scenario. I would try to:

1. Hit the regionals. They'll take positions against your order regardless if you see there quote on the inside or not. But you have to make sure that they are trading that particular stock. An easy way to see if they are making a market in that stock is to see if there are any prints on your time and sales. LeveII will not do the job because some of the exchanges have auto quotes and they actually may not really be making a market in that stock. If they do make a market then you have CHX, Boston, and Philly to unload stock. Most likely you can do at least 500 shares in each exchange. But it is going to depend on the NY'S quote. If NY showing 1 then you may only be able to get a couple of hundred shares off in each exchange. Also, don't break up an order and send 100 share lots to the same exchange in rapid fire because that is illegal. Breaking up an order and sending to different exchanges is legal.

2. If any 3rd market player is there in CAES, wipe them out with either A. direct connection to that market maker or B. Direct conneciton to CAES. or C. Brut or Arca market order for that size. If you go beyond that size then the rest of the orer will goto NYSE.

3. Wipe out NY's quotes.


If that is not enought to get rid of your position then you can do step 1-3 again. On thin stocks(vol of 100k-300k) you can probably get rid of 2k shares pretty easily. On more heavier traded stocks(5million+) you can easily do about 50K. Each exchange will easily do about 10k


Also, you need to have direct connections to each individual regional to make the above work.


Jeff--
 
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