STOCK MARKET WARNING!

[Eddie Haskell]

2. Maybe you wouldn't, but ...

Imagine a scenario where everyone wants out of the market due to events that happen overnight. Under panic circumstances, putting in a limit order may not get you out. Imagine the market opens down 1000 and continues to crash. You continue to chase the market, dropping your limit orders, but you can't catch the market. The market is now down 2000 points. Your stock's value has been cut by 20%.

What does one do?

Many people will decide to sell at whatever price the market will support and change their limit order to a market order. Yesterday, some people lost 40% in minutes. These were utility stocks not some speculative bio-tech. These were the kind of stocks people hold for retirement income. Again, these people lost 40% in minutes.