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Batten Down The Hatches

Traders Magazine, February 2003

John A. Byrne Editor

It takes plenty of luck and a strong stomach to play the trading game these days. The game sometimes takes a pro who uses various offsetting strategies to reduce his risk, a pro who has an intimate knowledge of his stocks. In this market, he cannot take his eye off the ball. Not since the Great Depression have stocks swung up and down so much in a rapid-fire succession of days. Nasdaq now has price swings of about two percent, on two out of five days. It contrasts sharply with Nasdaq in the early 70s. That's when those swings happened on one out of 10 days. Traders obviously look for price swings. But these new swings are sometimes more difficult to manage than the swings of the recent glory years. Back in the 1990s, stocks were on an upward trajectory, dotcoms were pricing at $150 a share, and the minimum increment was not a penny.

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