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A rule of thumb, highly debateable, is that a loss of 2% should be sufficient to get one to drop one's position.

The idea is: the position is losing money, it may lose more money, one gets OUT of the position and waits, if the position continues to spiral downward - great, if the position returns to the good size then one can contemplate getting back in.

Under worst cast conditions, one loses a small delta.

Under best case conditions, one loses a small delta.

Holding onto a losing position as it loses more and more with no limit is ill-advised.

[from one who bought CMGI at about $85 and sold it at about $3...]
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