Sabrient Select Opportunity Portfolio

Aug. 19, 2010 3:07 PM ETGDP
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Long Only

Contributor Since 2006

Ilene is editor and content manager at Phil's Stock World. Her educational background is in biology, pathology, and law. She has an M.S. in pathology and a J.D from Loyola Law School. She previously practiced law and currently writes, edits, and does research for prominent financial publications and other clients in financial services and law.

To try Sabrient's products yourself, click here for a free trial >

Sabrient Select Opportunity Portfolio

August 19, 2010 - Harvest Partial Profits in short position GDP

As I have discussed before, I am a proponent of "profit harvesting," in which you take partial trading profits in a position once it moves strongly in your direction. In general, for swing trades, I would look to bank some profits (e.g., 1/3 position) once a stock position has provided a 10% gain, and then again (e.g., another 1/3 position) when the balance of the position has reached a 20% gain. Earlier today, we booked profits in short position FHN, and now we have an opportunity to book some profits in another short position, GDP.

I previously stopped out of half of my original position in GDP on surprising relative strength despite a poor quarterly report. However, the stock has tanked lately along with Energy and the market in general. I'd like to lock in some gains to offset the previous loss.

Some of you might want to go ahead and close the whole position into this weakness. But I am going to close 1/2 of the remaining position (1/4 of the original position) at $11.44, which gives us a 10% gain on this portion of the trade. I'll let the balance of the short position ride in anticipation of even lower prices.

Best Regards,

Scott Martindale 

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.