A biotech IPO that falls hard off the debut.
Ex. pretty much every biotech IPO.
Lesson: don’t play biotech IPOs.
A recent IPO that didn’t necessarily perform well off the IPO debut, but runs on a headline released once the quiet periodd (QP) expires.
Take Profits without Regret
The point of this rule is to avoid getting in the habit of regretting having sold too early or too late when you stuck to your strategy and took profits. Avoid being greedy, and avoid making mistakes by being satisfied with profits regardless of what opportunities you may have missed had you broken your rules or deviated from your prescribed strategy or risk tolerance.
The point of this rule is to keep yourself from entering an IPO trade after it has already broken out to the upside. At that point, your profit opportunity has already been greatly reduced, and your downside risk has greatly increased. Better to let it go, relax, and wait for the next setup.
A typically low-float IPO that is seemingly intentionally under promoted that goes on a volitile run on the debut. We tend to see these as Chinese companies that appear to be fronts for money laundering operations. Read more about Stealth IPOs here