First post- here goes....
I want to protect a portfolio with around 20 stocks from a large fall. I'm not a regular trader, holding most stocks for around twelve months. I trade through Commsec and thought I would set conditional orders on each stock to achieve this. Yesterday I had a go at it but was a bit perplexed by the allowable difference between the trigger and limit price. For eg, on ANZ, I set a limit of 28.73, but the highest trigger allowable was 28.95. When I entered something higher, I got an error message telling me the difference between the two was too great. In a rapidly falling market ( the type I'm trying to protect against), I would have thought by the time the trigger has fired and the order placed in the market, the limit may already have been passed, leaving me holding the stock. I also wonder about the price opening lower than the limit in a worldwide fall.
I rang Commsec and the guy I spoke to agreed that it didn't seem right and would pass it on as feedback. We found the clause in the terms and conditions , which just says that the difference between the two prices has to be acceptable to Commsec!!! No clue even as to a percentage etc. He suggested another way around it would be to buy put options but I think this would be expensive. I really just want to have a set and forget type arrangement in place, that won't cost unless it happens.
Am I fussing about nothing - perhaps the order in all likelihood would be fulfilled (but the Commsec guy thought my point was valid.) I'd really appreciate your thoughts on this and whether I should consider some other way of protecting against a severe downward movement?