I am religious about stops. But sometimes they really bite me in the butt. That doesn't mean I'll ever stop using them. But every now and then, you get a story like this.
As regular readers know, I suggested shorting (or buying puts on) Overstock (OSTK). I set a stop above 28.50, which was the highest point it reached in 2008. Yesterday, it moved past this level (peaking at 29.59), so naturally I was taken out of my position. That's how it works.
Today, the stock is getting blown to pieces, losing nearly 40% of its value. I didn't make a mistake setting the stop. This is just one of those fish that got away. It's a shame, but it's worth having that protection.
