Investing 102

[GregWeld]

So here's why I like to use LIMIT orders.... and this is really probably only really useful for those buying larger amounts of shares -- but it is also something that all of you should know and understand.


This morning I put in some buy orders -- a couple for "DAY ONLY" -- in other words if the price I chose doesn't fill the order - then the order expires today...

Another one -- for Chevron (CVX) -- I chose "Good til expired" -- that is good for 60 days. The reason I chose that type of limit order is because I put a bid in way under where the shares are currently trading. CVX pays a dividend ($1.00) on MONDAY -- I hope the shares dip at least that $1.00 on Monday and therefore my order might get filled. If that works - then I effectively picked up the dividend even though I didn't own the shares on the EX date. Obviously I only pick up the dividend IF -- BIG IF -- the shares recover sometime within the next day or two.

I also like to scale into shares. I buy very large lots... and scaling in is important to my overall mental health -- as well as I can am "closer" to the market for the stock. Putting in a limit order helps me scale in --- and even though the shares might go below my purchase price -- I'm still closer in cost basis to where the shares are currently trading. Today I put in a limit order for Terra Nitrogen (TNH) -- I put that limit order in "day only" at $204.00 per share... for 1000 shares. So far I've bought a whopping 75 shares. But my point is -- once I put in that order - whenever their is a seller willing to match my price - I'm automatically buying. If it doesn't get filled completely -- who cares. Tomorrow is another day... and if the shares are going up -- then I've made some money on what I did buy... and if they're going down or staying steady -- then I'm at least closer (with my lower buy per share) that I would be if I just built a "market" order.


If I'm not in a hurry (rarely) to build the positions --- then I put in limit orders that are .50 or 1.00 LOWER than the "low" for the day. If it's a stock I just want to buy -- then I might be only .10 or .20 under the "market" price. That way when it dips just a bit during the day -- I'll most likely get a fill.

[GregWeld]

By the way -- please remember that just because I use examples naming names in here - doesn't mean that these names are appropriate investments for YOU. Please don't just copy what I'm doing. I do this EVERY DAY -- for YEARS... my holdings are bought and sold for completely different reasons than what you guys should be investing for.


So for example -- the limit order for Terra Nitrogen (TNH) was put in for $204.00 for 1000 shares ---- What I wanted to explain is that the high for the day so far is $205.21.... and the LOW for the day (most likely set by my whopping 75 share fill) is $204.00


When you're buying a 1000 shares ---- that $1.21 difference between the high and the low -- is a GRAND. How many of you make a grand that easy?? So to me -- that difference is important. Would I bother doing that for 100 shares?? No -- but I might just to use it as a way to learn --- and frankly -- that would be a hundred bucks if it gets filled....so maybe that's a good way for you guys to at least feel good about "gaming" the market just a bit.

[GregWeld]

So just a follow up to these "limited" thoughts.... LOL



My Chevron order for 2000 shares at $120 was filled today... and while it's currently quoted at $119.94.... My buy at $120 is a far cry from the days high which I would have bought at had I just placed a market order.... that would have been about $1.60 plus difference! On 2000 shares -- that's a lot! Thus my statement that even if the shares go lower than where I bought -- I'm a lot closer to the market than had I paid the market high for the day.

So since I was trying to capture the $1.00 dividend being paid Monday -- I put in another 1000 share limit order (good 'til canceled) at $119.00

[chr2002ca]

Originally Posted by GregWeld

Please don't just copy what I'm doing.

Oh, darn, I guess I should go cancel that buy order I just placed for 2000 @ $120 on Chevron stock.

Yah, I know what you meant, copy on a different 'scale'. Just messin' with you Greg. I see the numbers you post and I'm like, "Holy sh_tballs....that must be nice." Thanks for all the continued great advice and helping us try to 'get there'.

[GregWeld]

So here's how my buys went down today.... all set with LIMIT ORDERS

and the price where the shares closed today in red.



06/06/2013 Buy 1,000 CVX CHEVRON CORPORATION Details $119.00
-$119,008.95 * 119.59


06/06/2013 Buy 100 NNN NATIONAL RETAIL PPTYS REIT
Details $35.18 -$3,518.30 * 36.36


The NNN was an order for 3000 shares -- I got a whopping 100 at my price. I'm okay with that... that's the way it works!


06/06/2013 Buy 2,000 CVX CHEVRON CORPORATION
Details $120.00 -$240,008.95 * 119.59


This order was filled --- and now you see what I'm saying about my cost being closer to the market price... had I put in a market order my cost would have been possibly at the market HIGH for the day of 121.49 !! I didn't hit the low either which was 118.66..... But I did buy an additional 1000 shares at 119.00 - so that brings my AVERAGE cost down closer to market!


06/06/2013 Buy 1,429 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
Details $82.30 -$117,613.10 * 84.03


06/06/2013 Buy 100 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
Details $82.30 -$8,230.45 * 84.03


06/06/2013 Buy 75 TNH TERRA NITROGEN CO LP COM UNIT
Details $204.00 -$15,300.67 * 205.25


The TNH order was for 1000 shares at 204.00 --- I got a whopping 75 at my price and the order expired at day end... Again -- that's how it works. Rome wasn't built in a day!


06/06/2013 Buy 50 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
Details $82.30 -$4,115.22 * 84.03


06/06/2013 Buy 421 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
Details $82.30 -$34,650.18 * 84.03


06/06/2013 Buy 5,700 MO ALTRIA GROUP INC
Details $35.40 -$201,785.10 * 35.81


06/06/2013 Buy 4,300 MO ALTRIA GROUP INC
Details $35.399 -$152,219.55 * 35.81

[GregWeld]

Originally Posted by chr2002ca

Oh, darn, I guess I should go cancel that buy order I just placed for 2000 @ $120 on Chevron stock.

Yah, I know what you meant, copy on a different 'scale'. Just messin' with you Greg. I see the numbers you post and I'm like, "Holy sh_tballs....that must be nice." Thanks for all the continued great advice and helping us try to 'get there'.

Sorry Chris.... I was so busy typing I missed this! Good comment BTW I got a good laugh out of it. So thanks!


Yes --- scale is "variable" with the readers here... and sometimes I'm actually kind of embarrassed to post my numbers -- but I feel they're useful to show how the market works etc... and I think it's more meaningful when you can really see what a difference it makes etc. I'm still trying to keep this as "102" (not that it's MY thread)...

I think that the basics of "best of breed" etc have been well covered. Now some of the details or nuances of investing can be introduced.

[96z28ss]

Originally Posted by GregWeld

and sometimes I'm actually kind of embarrassed to post my numbers --

Yeah really make us feel poor!

[GregWeld]

Originally Posted by 96z28ss

Yeah really make us feel poor!

Think of it more as the carrot on a stick....

[WSSix]

I like the Limit Order idea. Considering how I like to by stuff at a discount, I see it as a good way to simply name your price. I can see myself eventually using this method.