Tuesday, October 08, 2013

Playing the opening for Twitter IPO

My latest thoughts on playing the open of trading for the Twitter IPO is a mix of limit and market orders:
  1. A market order to buy at the open.
  2. A limit order to buy at 5% above the IPO price.
  3. A limit order to buy at 10% above the IPO price.
  4. A limit order to buy at 15% below the IPO price.
Although, I'm not so sure whether to use the raw IPO price or the "indicating" price shortly before the open.
The market order will guarantee me a position.
The two in-the-money limit orders will guarantee that I stay mostly out if there is a large pop at the open.
The out-of-the-money limit order will get me a larger position if Twitter swoons shortly after the open.
If my limit orders are positioned relative to the IPO price and there is a large pop at the open, I'll open another limit order to buy at 15% below the current price an hour after the open.
Again, these are simply my current thoughts, and they are all subject to change as we slowly inch towards the IPO.
And, again, I'm buying as a long-term, buy-and-hold investor, so I am simply looking to get an attractive entry price here.

-- Jack Krupansky


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