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Dagon comments on Stupid Questions, December 2015 - Less Wrong Discussion

5 Post author: polymathwannabe 01 December 2015 10:40PM

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Comment author: Dagon 02 December 2015 07:43:50PM 3 points [-]

Note that for volatile assets (the very ones where you feel uncomfortable about unbounded risk), stop orders are not guaranteed to help. Remember, prices are not continuous - there is a discrete sequence of bids. Price can go from below your stop to MASSIVELY above it before your stop order can be executed. Most often this happens on news when a market is closed, but it can occur intraday as well.