The Crash Limit Order Strategy

Some wisdom was dropped on me once: “Place stealthy limit orders at price points you think you’ll never see in your lifetime.”

Why would anyone do that? The answer is straightforward: markets occasionally throw tantrums – flash crashes, drops, panic attacks – you name it. It’s at that point, the most irrational things occur. That’s when those “I’ll never see them in my lifetime” prices may actually hit.

The strategy is not complicated. The process is as simple as this: create a few limit orders at such low prices they practically are playing play hide-and-seek. That’s the key – these aren’t your garden-variety 1% drops. We’re talking seismic 10% shimmies, dramatic 20% swoons, and legit historic crashes of -30%. Case in point: my audacious Apple gamble at $99/share.

I’ve had this limit order for a while. It still hasn’t hit.

Now, the magic trick? There’s little to downside doing this. Just upside as you may one day get a lucky fill. It’s like a financial fairy tale. If your wish comes true, jackpot! Limit order fillings! If it stays a pipe dream, you’re still relaxing, feet on the table, enjoying a good book.

Speaking of modern markets, Ethereum at the time of this writing dipped quickly, shedding $200+ per ETH in the blink of an eye. Bet your bottom dollar someone had a low-balling party there.

Moral of the story: Whisper a sacred chant, place your ultra-low limit order on the magic carpet, and walk away. Who knows, you might get lucky.

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