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Say What? Fido wants an “exit strategy” - LOL

hank
edited August 2021 in Other Investing
Yesterday I opened a very small short inverse position on the Dow using DOG. I fully understand the dangers inherent in such an approach. Today I get this email …

“Now that you’ve placed a trade, don’t forget about the next important step – your exit strategy.
Having a plan from the start can help you: Take potential profits if you’ve reached your target gains.
Help manage potential losses by predetermining when to sell. Setting an exit plan for your latest trade doesn’t have to be complicated and Fidelity can help. Define and set one today.”


For my inspiration …

image

Comments

  • catch22catch22
    edited August 2021
    But FIDO hopes you've at least thought about an exit strategy. I consider this thoughtful of them.

    One may imagine the message you would have received from a RobinHood account.

    "Don't you want to buy some more?" "You call yourself an investor?" "Looks like a pretty chicken s#*@ trade to our system."
  • carew388carew388
    Yes-Robinhood would be telling me:"hey big shot,before hitting enter, how about adding a few zeroes to that FHKCX purchase you got there!"
  • hank
    edited August 2021
    catch22 said:

    But FIDO hopes you've at least thought about an exit strategy. I consider this thoughtful of them.

    One may imagine the message you would have received from a RobinHood account: "Don't you want to buy some more?" "You call yourself an investor?" "Looks like a pretty chicken s#*@ trade to our system."

    carew388 said:

    Yes-Robinhood would be telling me:"hey big shot,before hitting enter, how about adding a few zeroes to that FHKCX purchase you got there!"


    Actually (having thought about this), I think Fido doesn’t like or want bearish investors. They’re not good for business.

    In the interest of accuracy … DOG is an inverse ETF. It is designed to move opposite the Dow over relatively short periods (days, weeks). Technically it is not considered “shorting.” Here’s a link for anyone who wants to learn more about the distinction.

  • BenWPBenWP
    I have never tried the short game. If you pull up the DOG performance chart on M* you'll see the fund has had one year in the black since 2011, while $10K invested in DOG dwindled to $1000+ while the index tracking the Dow grew to almost $46K. Then again, what @hank is doing has nothing to do with long-term investing.
  • Old_JoeOld_Joe
    I'd think that the exit strategy would be about the same as for slot machines...
  • hank
    edited August 2021
    @BenWP - You are mostly correct. (But it has to do with moderating potential losses on the long end.) The rationale was explained somewhat better in my comment in @davfor’s recent thread.
  • rforno
    edited September 2021
    catch22 said:

    But FIDO hopes you've at least thought about an exit strategy. I consider this thoughtful of them.

    One may imagine the message you would have received from a RobinHood account.

    "Don't you want to buy some more?" "You call yourself an investor?" "Looks like a pretty chicken s#*@ trade to our system."

    Robinhood: "buy more! Don't you want to earn some confetti animations and more badges!"

    [producer, to the director's earpiece]: "Because RH needs the order flow since 80% of quarterly revenue came from it."

  • stillersstillers
    edited September 2021
    Fido posted this Exit Strategies page in their Learning Center since 11/17/20.

    https://www.fidelity.com/learning-center/trading-investing/trading/exit-strategies

    Uncertain what Robinhood offers their investors gamblers.
  • JoJo26
    rforno said:

    catch22 said:

    But FIDO hopes you've at least thought about an exit strategy. I consider this thoughtful of them.

    One may imagine the message you would have received from a RobinHood account.

    "Don't you want to buy some more?" "You call yourself an investor?" "Looks like a pretty chicken s#*@ trade to our system."

    Robinhood: "buy more! Don't you want to earn some confetti animations and more badges!"

    [producer, to the director's earpiece]: "Because RH needs the order flow since 80% of quarterly revenue came from it."

    WTF are badges? I've been using RH for more than 5 years and never heard of them.

    I really don't get the hate on RH. People using the platform do benefit from PFOF in aggregate; I've also used Fidelity for 10+ years and have cumulatively saved less than $1 for "price improvements" because of their "better" execution.
  • BaluBalu
    I thought all brokerages that charge zero commission receive PFOF which the brokerage keeps, not just RH. No?
  • Observant1
    BaluBalu said:

    I thought all brokerages that charge zero commission receive PFOF which the brokerage keeps, not just RH. No?

    Fidelity and Merrill Edge do not accept payment for order flow.
    There may be others...

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