Kevin Bertolini: Stop-Loss Strategy
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Case (Gen Exp)
An investor has purchased a share of Cisco stock and wants to protect himself from some downside risk using the stop-loss trading strategy. However, he doesn’t want to sell the stock prematurely based on short-term price fluctuations. What is the best threshold for the stop-loss strategy? How does it compare to the holding strategy?
This case is suitable for a management science elective course focusing on finance/trading strategy at the MBA or undergraduate level.
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