Wednesday, April 02, 2008

If you followed me and bought ETFC

ETFC has had a major run-up (up ~30% in <10 days). Lock in some gains.
Good chance they can run to $6 by earnings in 2 weeks, but start thinking about cashing out.

For example, set a stop on 25% of your shares at $4.50 and another 25% at $5.
If you bought 1000 shares at $3.50 (when I pointed them out), that's a $3.5K cost basis.
* Sell 25% at $4.50 and get $1125.
* Profit on 250 shares is $250 or 29%
* For remaining shares, cost basis is $2,375 for 750 shares or $3.17 per share
* Sell 25% at $5 and get $1250
* Profit on 250 shares is $375 or 43%. Total profit is $525
* For remaining shares, cost basis is $1,125 for 500 shares or $2.25 per share

At this point, you will have huge flexibility. Investment exposure has been reduced 2/3s. But you retain ~50% of your initial shares.

Or you can get greedy and see how high it will run.

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