After Linn Energy fell on Tuesday and I received a $13,000 margin call, I thought it would go back up so I did not sell while it was falling. I thought, there is no way it would fall another day.
I was wrong and now I have a $68,000 margin call. I presume I am not the only one, though probably only one who admits it. I have to Tuesday closing unit they sell. So, the question is, what to do?
I could hold and hope for a bounce. But, if it falls further, I lose even more under a forced sale situation. What would you do?
i would sell man. i mean the stock is definitely going to go down further. I put a lot of money on short and i expect it to go to $17 USD before it trickles back up maybe even lower. SEC investigations are a huge hit.
Sentiment: Strong Sell
Sell enough shares to satisfy the margin call and buy calls to replace the stock you sold. When Linn goes up, the increase in your buying power will allow you to exercise the calls. I used to do this in 2009 when stocks would have these insane plunges that would last far lower than I thought possible.
Its a total unknown- LINE and LNCO are down a ton, "maybe" near the bottom? If the Berry deal is legit both should rise again/ if further problems arise then who knows. Since you didn't sell earlier, its probably too late now- but its your money!!!!!
You should learn to buy Put Options, just like Linn Energy does! If you are on Margin and there is negative chatter on a stock you own, you gotta protect yourself with put options.
Sentiment: Strong Buy
only if you are undisciplined and overdo it.
Margin is a loan like any other. If margin is a loaded gun, then so are mortgages, credit cards, car loans, student loans, every other form of debt.
They are all useful so long as you don't overleverage.
I don't have crystal balls, but this SEC thing can drag on for awhile. The main worry is the Berry acquisition not going through. If LINE was having a QT Divy I would be knee deep in this mess. I plan only to use Vegas money on some Jan 2014 calls. When bad news hits its best to sell ASAP and then step back and see what happens. Don't stand and fight, better to run like hell.