All righty. Hello, everyone. Welcome to Getting Started with Stock Investing. My name is Barbara Armstrong. I do not have Connie' s fabulous red hair, but I am here filling in for her nonetheless, as she has a well-deserved Friday off. Today, we' re going to talk about how much to buy, and you know, another way of saying that is position sizing. And I' m a big fan of having a recipe for, you know, both cooking and for cooking things in the world of investing. And so a good trading plan has, you know, four major components: what to buy, when to buy it, how much to buy. And then when to exit, both if the trade is going for you or against you. So today we' re on the topic of how much to buy part of the program.
So I' m delighted to be with you. This is the last webcast of the week. So for those of you who are with me live, I appreciate you showing up. So hello to Greg and Wiley and Riceburg and David and the rest of the gang. If you' d like to type a greeting into the chat, if you' re checking this out for the first time. I' d like to welcome you. We also have Lee Bull with us in the chat. He is a friend and fellow coach, and he knows a lot about the world of trading and investing. And so if you' ve got any questions, feel free to type those into the chat and we' If you' re watching this in the archives, you too have a voice.
If you have a question, just type it into the comments down below and we will - I do respond to those on a daily basis. You can also reach out to Lee or I, and we get to interact with you through the world of X, formerly known as Twitter. I invite you to follow us both at Lee Bohl, B-O-H-L, C-S for Charles Schwab, and at Barb Armstrong, C-S again for Charles Schwab. Okay, so let' s get through our important information so that we can get to the topic at hand. So know that everything that we talk about in this class is for general information purposes. Only and shouldn' t be considered or construed to be a recommendation or endorsement of any particular security or chart pattern or particular investment strategy.
And while we look at technical analysis, other approaches, including fundamental analysis, being aware of when earnings is going on, what' s happening in the news, news on a particular company, all of that helps you make a more informed decision. We use the paper money. It' s a platform on the thinkorswim desktop, and it' s for educational purposes only. It' s a great place to learn, but know that just because you' ve had success in paper money doesn' I mean that in a different time period when you go over to your live account that your results will necessarily be the same. I' m a big fan of using stop-loss orders. We demonstrate that often, but just because we put a stop-loss order in, it doesn' t guarantee we' re going to get out at the price we' ve requested.
Okay. If a stock were to gap down, and we' ve seen both a lot of gapping up and down over the last week or so as earnings is, we' re rolling through earnings, you know, it will generate a market order. And if the stock were to gap down, we might get out at a price that was less than what we had anticipated. Know that all investing involves risk, including the loss of principal. Okay. So, you know, in this series, we go over different types of stocks. Growth stocks and value stocks. We look at the charts, which in using technical speak is technical analysis. We look at this is the, you know, when to buy, when there might there be an entry signal that indicates that this might be a good time to add this to our portfolio.
We' re looking at risk management, which is our how much to buy, which is our topic for today. And then when to exit. And then we look at overall top-down analysis. Different time frames, and then we look at how to calculate the intrinsic value or an estimate of that in Class Number Eight. So, for today, we' re going to discuss risk, we' re going to discuss the emotion around that, and, you know, I love to say that there are four letter words that I didn' t want my children to use growing up. You know, I love to say that there are four letter words that I didn' t want my children to use growing up. But there are also four letter words in the world of investing. One of them is hope.
Hope is not a trading strategy. Neither is fear. And to use another F word, FOMO. That' s not a strategy either. And so, how can we calculate our risk and address it such that we don't? Let these babies take over the shop. Because I' ve seen it happen. I' ve done it. Like most mistakes you can make in the world of trading, I' ve made at least one. Some of them I' ve done many times just to be sure they didn' t work. And using these strategies to try and manage your portfolio, yeah, they don' t work very well. So, I' m going to do this. You know, those signs like do not enter'. Yeah. Yeah. Yeah. And I' m a very optimistic person. My kids would say annoyingly optimistic, actually.
But, yeah, we Re going to look at some examples of how we can, you know, be both optimistic but realistic and be mindful of the fact that, in spite of our maybe superlative abilities at fundamental and technical analysis, we might end up having a stock that doesn' t go up as we' re expecting. And how do we manage that, you know, without relying on this stuff? Okay. So, that' s what we' re going to look at. Just. Okay. Managing risk. And this is really critical to your long-term success as an investor and trader. And I know in 2008 and 2009, a lot of people, they hung on and they hung on and they finally couldn' t stand it anymore. And they. They went to cash and they never got back in the market.
And then they risked, you know, they missed the, you know, one of the biggest bull runs in the history of the market. You know, and so you don' t want to hang in too long, you know, but you also want to know when to get back in so that when to get in and out can be important. Okay. So, what' s one of the benefits? Is that if you have a plan, a trading plan for, you know, and your trading plan for a growth stock may be different than it is for a dividend- paying stock. You know, or some people will use stocks in such a way that they' re using it for a shorter- term investment. And some use it as a longer- term investment. And your plan, your trading plan, may change.
But if you establish and have, you know, some kind of risk management component in there for whichever plan. You' re using to say, hey, when will I say that this has stopped going up? And, you know, that can help you in preserving your trading cap capital. When you have discipline, a lot of people think discipline is really constraining. I think it' s very freeing because when I have the discipline of trading a plan, then I' m free not to worry about it. I have a plan. And if I position sized accordingly, then I don' t have to. I don' t have to worry about how much I' m losing because I' ve already in my in my head. I' ve already decided how much risk I' m willing to take when I buy shares of a stock.
And so that, you know, emotions don' t end up ruling the roost. You know, because this this isn' t a trading plan trading based on on hope. And I' ll go over some examples of that. Of how that. Can kind of lead to our demise or the demise in the size of our account. And there' s a couple of different types of risk. There' s what they call systemic risk. Well, what do we mean by that? Well, when the pandemic hit and, you know, the market had that big knee jerk reaction and felt like a rock. You know, sometimes it' s referred to as market risk and you can' t diversify for that. Everything fell down. There wasn' t a single sector that was in the green.
Probably in March of or April of 2020, you know, and so it' s hard to eliminate that through portfolio diversification. But you could have a plan that says, hey, if the S &P goes below the 100 day moving average or 200 day moving average, then you' re going to, you know, start really tightening up your stops or or considering going to cash. And then there' s non -systemic risk, which, you know, is diversifiable or, you know, unique risk on a stock by stock basis. So, you know, what if you have a biotech stock and they are going before a board for approval of a new drug, you know, and it doesn' t get approved? You know, the stock can end up moving or bad news comes out on a particular company.
Or on an industry group. And so, you know, that we can we can reduce our risk there by diversifying across a number of different stocks and by diversifying across different sectors. And what do I mean by sectors? Well, the S&P is made up of 11 sectors. And I know that Connie talks about that in another class. And so, you know, I talked to someone one time. And he was doing a trade over earnings. And I asked him kind of what his purpose was. He was looking to generate some income. But every single stock that he looked at was in one sector. And I said, why the energy sector? Now, energy has been pretty strong the last three months. You know, but it' s because he was an engineer in oil and gas.
And so that' s what he was comfortable with. But there was like zero diversification. And so, you know, some investors will say, I don' t want all my eggs in that one basket. And because, you know, if something happens in the energy sector, then you' re kind of snookered, you know, or in one particular sector. OK, so you want to manage risk, not avoid risk. And I' ve read a lot of books on entrepreneurs, on people that have started companies like Charles Schwartz. Or like Bob or Nike or like pick a company. And it' s really interesting because they all ended up taking a lot of risk to do what they did. You know, but they want they look to manage the risk, not avoid it.
And so, you know, if you want to avoid risk altogether, you know, you could invest in nothing. But then, you know, you' re not going to have a reward either. So, you know, having losing trades can it' s part of the cost of doing business. And it happens. So what we want, you know, to do is manage our risk. And, you know, when I look at a small risk, a small loss, I think a small loss can be a beautiful thing. And why is that? Because it beats the stuffing out of a large loss, doesn' t it? Right. OK, and you' ll never. You know, you' ll never learn how to win until you learn how to lose. I was a big fan of playing board games with my kids when they were young.
And part of it was, I mean, they learned how to count and take turns and that kind of thing. But you also have to learn how to win with grace and lose with grace. And I think these are important things. And these are skills that will serve you throughout life, as it turns out. And you' ve got to control how to psychologically handle a loss. And we talk about a lot about this. In the other classes that I teach, that sometimes if you go back on a stock and you look at a trade you place that turned out to be a losing trade and you say, well, did it make sense that I got in when I did or was I missing something? Oh, I bought that the day before earnings and then it gapped down.
Maybe that wasn' t the wisest time to enter without a protective put or something in place. But so this is controlling how we look at losses. This is one of the big differences between amateurs and those who are more experienced is that, you know, a more experienced investor will plan for it and know that it' s just kind of part of it just kind of comes along with the territory. OK, so we' re going to figure out how to calculate trade risk. OK, and and risk is the amount that you' re saying if I were to lose this amount on this trade. I would still be OK. I' m OK with that. And and some will say, OK, if I have a hundred thousand dollar account and I' m willing to risk two percent on any one investment, then I' d be risking two thousand dollars.
Now, if you' re starting out, you may be cool with that number. If you had a million dollar account, you know, that would be twenty thousand. Now, there' s another coach. He' s actually now. A manager. His name is Scott Thompson. And and he calls it the sleep number. He says, ' What is your sleep number?' And so you might say, ' Well, you know what? I' d be OK if I lost two thousand.' Well, would you be OK if you lost that one, two, three, four, five times in a row? That' s ten thousand. That' s ten percent of your account. And if you go like... Holy smokes, Batman, not a chance. I would be freaking out. I would, you know, I' d be waking up in the middle of the night sweating bullets. Well, then this number is too big for you. So maybe you want to change it and say, ' You know what? I' d be more comfortable if this number was one percent and one thousand.' And the example we' re going to do today, we Re going to say half of our percent. And so just, you know, and your number can change. It can change over time. Yeah, just one sec.
OK. OK, so just one sec. I keep getting these messages coming up. Close it. Would you like to restart your system now? No, actually, I would not. OK. OK. Are there any questions? We' re going to go out and we' re going to do a couple of examples. And so, you know, before you place a trade and one of the things that I have been saying for years is if you' re buying anything, you know, whether whatever type of trade you' re doing. But if you' re buying a stock, you know, when are you going to sell? Well, when it stops going up or when it starts going down. Well, how do you define starts going down? Yeah. And, you know, is that a specific, can you assign it a specific number?
So if we have a stock that' s uptrending. Oh, sorry. I thought I' d erase that. So we have a stock that' s been going up. And it' s pulled back and it looks like it' s going to continue to go up. And so we buy shares right here. Say we buy 100 shares. And our 30-day moving average, as it turns out, it' s been kind of coming along. And then it' ll come down and kind of kiss the 30-day moving average and then bounce and kiss the 30-day moving average and then bounce. And if this is a moving average, you might say, well, this has been acting as kind of a floor. So I' m going to put my stop loss order about 3% below that.
Now, some might make it 2%, some might make it 4%, and some might make it 5%. And if it goes 3% below here, so maybe this is at, you know, our entry is at 30 and we put a stop at 28. So how much are we risking? $2 per share. And this is saying, well, if we' re willing to risk $2,000, then it says we could buy 1,000 shares. Now, there' s two components to, you know, deciding: Position sizing. And so one is your max risk per trade. And the second one is, you know, how big can any one or per position per trade. And the second one is what percentage of the total account. So you might say, you know what, I really love Netflix.
And, you know, I own shares of Netflix. But you don' t want any one position. And I' m just making that up. Like, could be any stock. I don' t want any one stock to be more than 5% of my total account or 10%. So that means if you had a $100,000 account, you wouldn' t want any one. You' d want any one position to be more than 5% to $10,000. Now, I teach you trading a smaller account class. We started with $20,000 and our max position size was $5,000. And you might say, like, are you crazy? That' s 25% of your account. The reason we did that is we wanted to be able to do some examples that required owning 100 shares of stock.
And so, you know, it had to be a stock that was under $50. You know, and this is 25% of your account value. But if you have a larger account, like, you know, a million-dollar account or $100,000 or whatever it is, you know, you might say, you know, I don' t want it to be more than 5% to 10%. And that number can be whatever you want it to be. At 5%, then you could hold up to 20 positions. At 10%, then that' s only 10 positions. You know, and there' s a lot of other positions. And there' s 11 sectors. And so, you might want to go with a smaller percentage so that you can have a little more diversity.
But again, I' m just throwing ideas out here. Okay? Okay. You know, and if you' re a shorter -term trader and you' re putting a target on something, you might say, well, I don' t want to do that. You might say, okay, I' m risking $4. My goal is to get out when it hits 36. So, my risk -to -reward ratio is something you may want to calculate. My intention is to make 6. I could end up losing 4. And some want to make sure that the risk they' re taking isn' t greater than the potential reward. Okay? So, you want to calculate how much you' Re risking, how much you can make, and then compare one to the other. All right?
And this is if you' re a short-term trader. Okay, so let' s go out and look at some examples because I find that that really can be helpful. So, let' s bring up our Thinkorswim platform. And now the market is closed. But one of the ones I wanted to look at was Freeport-McMoran. And this is a stock that is in the material sector. It' s a mining company. And they do gold. But they' re really known for copper in both North and South America. They have several mines. And there' s been a lot of demand. Demand seems to be rising for copper. And we' ve seen that this stock, you know, which was kind of in a bit of a pullback. And, of course, we' re talking about this today.
You' re going like, where were you weeks ago, Barb? Well, so it was kind of downtrending. And then it broke out. This is called a diagonal resistance breakout. And it came up and then pulled back with the rest of the market. And it just had earnings. So, I went and looked at earnings. It beat on both sales and revenue. And, you know, I looked at, you know, some of the analysts. And both Argus and Raymond James raised their price target. And I looked at their price target on this stock to 54, you know. And that doesn' t necessarily mean it will ever hit 54. But if we see that this is in an uptrend, it' s up 18% year-to-date, up 7% this month.
And if we look at our portfolio, and one of the things we can do is add sector as a group. And so, this is in the material sector. So, we can see in this demo account. So, we can see in this demo account. So, it started with half a million dollars back at the beginning of November. You know, and if you don' t know how to add that, you just come to this little sprocket here. And you have to do this by section. So, you could just type in sector. Okay. And then go ahead and add that. I' ve already got it. And then you' d add that item and then hit okay. So, we can see how many stocks. Do we have in the material sector? Well, we' ve got communications.
That' s T-Mobile. We' ve got technology, communications, financial, energy, staples, discretionary, technology. We' ve got another energy stock here. And, you know, if we wanted to add that sector to these other stock positions, not a single thing is in the material sector. Oh, I did have it. Yeah, so materials and technology. Oh, so we do have one. Dow. Okay. So, if we look at this and we say, okay, you know what, let' s add that. And, you know, do we put it in our stocks that we own because it pays a dividend, as we do with this energy stock? And, you might say I don' t even know if it pays a dividend. Pays a dividend? Well, if we come to the trade tab and we come down, we see it has a dividend yield of 1.
19%. So that isn' t high, but you know, it beats a poke in the eye with a sharp stick, right? And if we said, okay, I' m going to come over here, close this, and I have a $534,000 account. And you might say, well, once a quarter or once a year, I' m going to see how much is in the account. And then I' m going to take 5% of that. I want my max position size to be no more than 5%. So if we were starting with that $500,000, just to make the math easy, and we multiply that by decimal zero five, that would give us 5%. That would be a max position size of $25,000.
And then if we said we don' t want to risk, we' re just taking over, maybe we' ve inherited some money or whatever it is, and we' re kind of new to this world of investing. Maybe we' re seasoned veterans and still we' re saying, you know, this is a nice nest egg. I don' t want to risk more than half of 1% of that $500,000 times decimal zero zero five. If I said half of 1%, that would be $2,500. So we can have a position size up to $25,000. So we could buy, 500 shares of Freeport, that would be, you know, and if we want to see what that is, we' re just going to come to.
And now, if we' re willing to risk, so we' re going to put a stop on this, why are we doing that? Because if we' re saying we' re not willing to risk more than $2,500, well, we could divide that by 50 and say, okay, we can buy 50 shares then. Because if we bought 50 shares, we' re going to put a stop on this. And if we' re willing to risk 50 shares, that would be $2,500. Because Freeport, it could go to zero. Now, what' s the likelihood of it going to zero? Not high. But is it possible? It' s possible. So if I took a look, and one of the ways we can see what the probability is, if I come to the trade tab, and we open up the option chain.
Now, we don' I' d love to talk about options in this class. But if I said, ' If we come out' to July, and I look at this, it' s trading at $50 right now. If I take a look at this $40 strike, this is a price. And I added something called the probability of it coming down and touching that strike at 40 is about 18%. So you have about an 81. 5% chance that it' s not even going to come down and kiss that 40 level. So the odds of it going to zero, you know, in the next 84 days, you know, are pretty low, you' ve got like an 11%, only 11% chance that it could come down to 36.
This is the probability of it coming down and touching that. And the probability of it being in the money at that time, like trading at that level is would be even lower. But is it possible? Well, might I show you Peloton? You know, when the pandemic hit, a lot of people were thinking like, wow, you know, I wish I thought of that earlier, it went up to $171. And, you know, it recently hit a low of 291. Today, it' s trading at 316. And so it' s really important for us to decide when we' re going to exit, so that we are not sitting hoping that this will be a good trade. We' ll make a comeback, you know, with a stock that was trading at 170, and that we may have bought for over $100 a share, you know, that' s now trading at $2.
91. You know, or if we look at Weight Watchers, this one lost a lot of weight, you know, in the last five years, high of 47. If we go back further, it was up over $100 a share. Dollar, not under $2 a share. You know, and I don' t, I don' t say this to impress you with how, you know, bad it can be, but to impress upon you the importance of, of position sizing appropriately, and having an exit strategy. So coming back to Freeport, we say, okay, we don' t want to risk more than $2,500. If we buy, you know, if we buy 500 shares, we want to put an exit in. So if we come down here to the low of this day, and we say, okay, we have that low around $47.
14. So what was the low here? $47. 38, $47.10. So let' s call it $47. 10. I' m going to take $47. 10. This is our recent low. And I' m going to multiply that by 0. 97. It' s like if it goes more than 3% below that, it' s probably not heading in the right direction. So if we come down here to the low of that, it' s probably not heading in the right direction. And so we would choose to exit. So if we buy it at $50. 50 and our exit is at $45. 68, how much are we risking per share? We' re risking $482 a share, and we' re going to multiply that by 500 shares. Is that below $25,000?
It is. So does that honor our risk? So if we come down here to the low of this day, and we buy 500 shares, we want to position sizing rules. It does. Now, if it were to gap down, could we get out at a lower price? We could. But we' re making an attempt to, you know, manage this. Okay. Okay, so we' re going to go ahead and put this in. We' re going to right- click. Oh, I' ve already got this down here. Buy custom with a stop. And so we' re going to go ahead and put this in. We' re going to right- click. So we said we wanted 500 shares, there' s a little it looks like a firecracker, we' re going to turn that into a paperclip.
And then that matches our buy and our sell order. So we' re buying for $50 and 35 cents. That is the current, you know, bid and ask price. Now the market is closed. The last price was 5050. So we might want to put in 5050. But we' ll look at this on Monday morning. You know, as soon as the market opens, and then we' re going to put in our stop, which was 4568. Now we haven' t put a target in to say when we' re going to stop getting when we' re going to exit. But now that we' re in this trade, how might we manage it? What might our weekly routine be? And we' re going to put this in our well, it pays a dividend of 1 .
19. So we could put that in with our stocks that pay a dividend. And again, it says here, no guarantee that you' ll get out at the price you requested. We' re going to send that in. Okay, now let' s look at a stock that' s already in this portfolio. So we have Amazon. And when did we buy this? We bought Amazon January 24. So let' s come and look at this and say, just look at how we might manage this since we got in. So December, so we bought 100 shares here, December 4. And then another 100 shares here. And so our first stop on this may have been, you know, 3% below our 30- day moving average, or it may have been 3% below here, if we wanted to give it lots of room.
So at $127. 74 times 0. 97, our first stop might have been around this $124- ish level. Okay, so that might have been our first stop. And, you know, then it went in, and it came up and came back, it came below the 30- day moving average, and then continued to move to the upside. So at that point, we' re going to have a lot of room. And then we' re going to have a lot of room. And then we may have come and looked at this and said, ' Okay, our low on this day was $144. 05. Let' s move our stop up $144. 05 times 0. 97. So we' re now going to move our stop up to about $139.
75, so around the $140-ish level. So now we' ve canceled and replaced our stop. And if we bought it on this day, what did we pay when we got in? Well, we paid around, our close for the day was $147. Call it $146, $147. So now we' Ve taken our risk and we' ve tried to reduce it. If we are stopped out, we would still be in a losing position. But we would have lost quite a bit less. We' ve now taken $15 a share worth of risk off the stock. And then it continues to go up. And maybe our guideline says like, hey, if it closes below the 30-day moving average, we' re going to tighten up our stop unless it' s just before earnings.
And then you might consider a different way of protecting a position. But if we had our stop here and we hadn' t changed it, we might look at this day and say, okay, well, it went to $166. 32. Was the low. I' m now going to move my stop up to 3% below that. So I m going to take $166. 32 times 0. 97. So now I' m going to move my stop up to about $161. And now what I' m trying to do, I' ve eliminated my risk from the perspective of I paid less than $161. $161. paid, well, we can come in here and see. We paid $146. 10 for the first 100 shares, and then we paid 157 for the second 100 shares.
Okay. So what we' re trying to do now by having a stop around 161 is protect some of our gains. And let' s say it gaps up on earnings. Well, then we might move our stop up to 3% below this level. And if it gaps down, and if it opens below this 161, then we would get, there' s no guarantee we' re going to get out at this $161. 63, but it would trigger a market order to exit our position. And have we seen gaps? Well, we' ve seen gaps up. May I show you Google? Today, like, you know, up 10% on the day. And then IBM, you know, it was only down 1% today, but, you know, yesterday it had a humpty-dumpty kind of move.
You know, or Netflix was another one that, you know, had a humpty-dumpty move, I call them, you know, when it gapped down. So if our stop had been in between here, you know, the opening price would have triggered a sell order. Okay. Do you want to do another? Yeah. Yeah. And Lee has a good point. Like, when we look at this, like, if we look at Netflix and you say, ooh, like, that was a big drop. Yeah, it was. And could it go to zero? Yes, it could. But, you know, what are the probabilities? As the stock moves in price, those probabilities change. Okay. So let' s come and look at something in the banking sector. So Capital One Financial. So, you know, this has been uptrending.
You know, it' s up 11. 5% so far this year, and it was kind of going sideways. And, you know, and then on earnings, it had a narrow miss on earnings per share, but beat on sales. I looked at a number of analysts, and the average price target was around 155 on that one. And, you know, this one has a P/E ratio of 13. 6, which someone could consider a value stock. Now, this one doesn' t pay a dividend. You know, so if you were looking and said, ' oh, no, just a minute', it does. You know, so these scripts aren' t always bang on, are they? So it does pay a dividend of 1. 6%. So if you' re looking for a dividend, you' re going to pay a dividend of 1.
6%. So if you' re looking for a dividend, it' s uptrending. The financial sector has been strong. So if you said, ' well, and I see an entry', you know, we' re on the other side of earnings, and it' s come back down to this support level. So if we could have a $25,000 position, how many could we buy? Probably about 150 shares. And where might we put a stop? Well, if we want to give it some room, if we come down to this recent low, 136 . 25, and we multiply that by 0 . 97, that' s 132 . 16. So if we' re looking at that as our stop, how much are we risking? Well, we' re risking about $14 a share.
So if I said, okay, if I' m willing to risk $14 a share, and I did that 150 times, am I over my $2 ,500? You know, we' re at $1 ,982. So if we look at that, and we say, okay, well, let' s come to the trade tab, we' re going to right click, we are going to buy custom with a stop. I' m going to put in here 150. And again, because it s now a paperclip instead of a stick of dynamite. You know, it' s going to make these match. And then we' re going to come down and say, hey, if this gets to the point where it' s trading at, and what was my number? 132 . 16, we would like to exit.
And we' re going to make this good till canceled. Now, just because it says good till canceled, it doesn' t mean it' s good forever. Okay? It doesn' t mean it' s good forever. It' s either three months or six months. So if you come in and you look at your orders, and it doesn' t have a little chiclet beside it, it means, so this is 22 ,000 is our position size. We' re risking, did I get that right? 15. So 49 times 150. Yeah, we' re risking $2 ,300. Are we okay with risking $2,300? We are. I' m going to put this in here. Send. So that' ll be teed up for Monday. So somebody' s asking, what if you forget to put a stop on? So let' s say we come out here and we look at AMD. And AMD has had earnings. I know they' ve got earnings coming up.
Let' s look at our Nutanix here. So we have 100 shares of NTNX. This is a tech stock. It' s trading. We bought it at $63. 61. It' s trading at $61. 66. So let' s come and look at this. There' s nothing beside it, which tells me that I either don' t have an order, a stop order, or it' s been put in the wrong place. So let' s come and look at this. There s nothing beside it, which tells me that I either don' t have an order, a stop order, or it' s been putting the wrong place. So I' m going to come down. These are sorted by symbol. Is there NTNX anywhere? No. Okay. Well, let' s come and look at the chart and let' s add a stop.
So when we look at this, we can see if we' re looking for a support level, sometimes it' s a moving average. But what' s been happening with this stock that' s up 30% year to date is it kind of came up and went sideways. And this 59% 40 level kind of acted as a ceiling. And then it' s come down and kissed it a couple of times. So if we look at these recent lows here of, say, 58 . 91, what if we put a stop 3% below that? So if we took $58. 91, and I can do that over here, $58. 91 times 0. 97. And when I do my weekly review, of all my positions, so that would be $57. 14.
One of the things I' m looking for is, are there any stocks here that don' t have a little chiclet beside them that says ' Sell'? It means I don' t have an exit in place. And if I don' t have an exit in place, it means my risk is the net liquidating value of the stock. And so I need to fix that. So for Nutanix, we have 100 shares, we are going to right click, create a closing order with a stop. And we' re going to put in $57. 14. $57. 14. And we' re going to make that good till canceled. It could be too that we had a stop and it expired. Okay, Lee is saying, these good till cancels, they' re, they' re good for 179 days.
How' s that for specific? Thanks, Lee. He' s great about that kind of stuff. So if you wanted to do some more practicing, you could look at the positions in your paper money and practice calculating where you might put a stop. You could also look at some stocks like Citigroup. You know, here' s another stock in the banking space, and has banking, you know, been bullish after getting like profoundly beaten up last year. You know, here' s one up 20% year to date. It' s now on the other side of earnings. Now we saw it pull back on earnings. So what happened on earnings, you may want to go look at that. You know, and this has a dividend yield, you know, of 3. 4%.
It' s in the value stock category, the P/E ratio, what this means, if you' re not familiar with it is for every dollar of earnings, you know, it takes $18. 27 worth of stocks to generate a dollar of earnings. So the lower this is, the more attractive is someone say, okay, you know, growth stocks, like if we look at a Tesla, you know, P/E ratio of 43, or Nvidia, that P/E ratio of 73, that So, definitely a growth stock, you know, as opposed to, you know, a more mature value- type stock, you' re not buying a Nvidia, you know, for the dividend. Okay, so guys, we' re out of time, I have enjoyed getting to spend this time with you. We did some examples.
And, you know, at the end of the day, we discussed how to manage our options and that knowing when we' re going to get out, and updating that on some type of regular basis, reviewing your positions, and, you know, taking a calculated risk. So that if the stock continues to go up, you don' t end up getting stopped out too early or exiting the position too early. But that you' re giving it enough, you know, room to grow. My dad used to say with kids, you want to give them enough room to grow without, you know, you' re not going to be able to get enough rope to hang themselves. So, so have a really great weekend, get out and hug someone you love. Don' t forget to hit the like button. Please subscribe to this channel. And don' t forget to follow Lee and I in the world of X, Lee Boll, CS and Barb Armstrong, CS. That' s it for now, guys. Know that all our examples were for example purposes only. Have a great weekend. Bye for now.
