I'm stewing over being stopped out a couple of times recently and hope you don't mind if I vent a little on here. I don't feel I've quite grasped the what/why and how of it yet and would welcome comments.

The latest occasion was losing my holding in Patisserie Holdings (LON:CAKE) last week on the cheap. I don't get to watch prices when I'm at work so it was only when I got home and was cursorily checking prices that I eventually noticed I no longer had a holding, despite the price having risen slightly. What! A look at the chart and also the buys and sells and I could see the sharp downwards spike that had snaffled my shares (just hitting my sell price by about a penny). The mark-down had lasted all of three minutes and during that time had taken a whole bunch of small investors out (there were no buys showing) before the price shot back up and resumed at its previous level pretty much exactly where it had been just before.

I felt I'd been mugged. I'm not entirely sure who by - the market makers, perhaps? And if so, is it even legal for them to manipulate the market in that way?  It's a disorderly market! Not that I expect the FCA to be interested if it was.

I'm wary now and wondering if there is any point in using a stop loss. The non-guaranteed ones don't offer much protection against a sharp spike anyway. Can market-makers see where people have their stops and aim for them? Or am I being overly paranoid?


 

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