How To Handle Your Really Big Gains

9 | By Michael A. Robinson

I get the same question every time we double our reader’s money:

“How do I handle the really big gains?

I mean, what should I do now that my stock has zoomed past 100%? Cash out? Hold? Load up on more? What’s the best move to make now?”

Clearly this is a great “problem” to have. And, I admit, every time I get this question, it gratifies me to know I’m doing my job: Helping my readers make a bundle investing in tech.

Yet, it’s completely understandable why many investors, not use to making so much money, and experiencing the thrill of victory, suddenly freeze when facing the daunting prospect of ‘what to do next.’

The last thing you want to see is your gains skyrocket past 100%, and then watch your profits dwindle as the stock recedes.

That’s why today, I’m going to show you one simple strategy that can ensure this never happens to you.

It’s a strategy I follow to a T every time I double my money.

And it’s incredibly easy.

In fact, this single strategy accomplishes something absolutely critical for your future investing success: It removes risk… while still giving you the chance for infinite upside.

Let me show you how this incredibly powerful – yet amazingly simple – strategy works…and how you can start using it for massive gains right away.

The “Problem” Every Investor Ought To Have

If you’ve been following along on our journey to create meaningful wealth from tech, I’ve repeatedly told you that doubling our money in this sector isn’t that tough to do – if you know what to look for.

It’s clearly stated in Rule No. 5 of my Tech Wealth System: You need to find companies that are growing earnings at high rates – 15%, 20%, 30% or more a year…and companies that can do this repeatedly.

All five of my rules tell you how to find such companies step-by-step.

The real dilemma for many investors, however, is what to do after a stock doubles – and you have a chance for some really life-changing gains.

Now, most people will tell you when your stock doubles you have three main options:

  • You can cash out, bank the profit and look for the next opportunity. This method eliminates any downside risk on the position. And hey, who can criticize someone who was smart enough to double their money?
  • You can let your position ride, but protect your downside with the use of “insurance” like trailing stops. I’m a big advocate of trailing stops but if the stock hits your stop, you won’t enjoy any subsequent gains, if the stock later resumes its run.
  • Or you can let your entire investment ride without any “insurance” whatsoever. From overall standpoint, this could net you the biggest profits, but it’s also the riskiest move of them all.

Any of these options could potentially make sense, depending on your overall investment goals – and your tolerance for risk.

But I believe my strategy for handling big gains is far superior…

It’s called a “Free Trade.”

It works like this. Once a stock in your portfolio has doubled in value, you automatically sell half. At that point, you have recouped all of your original capital.

At that point, you really are working with free money. You’ve covered your initial investment and are now literally playing with the “house’s money.”

Having converted your investment into a Free Trade, you’ve really achieved the best of both worlds.

You’ve not only paid for your trade, limiting your risk, you’re also getting the chance to capture a nearly infinite upside.

Of course, as I’ve said, most people aren’t use to making this much money and doing this on a regular basis. And there are several ways to handle such gains.

So, let me show you some recent examples of how I used the Free Trade strategy with my readers of Radical Technology Profits, my aggressive trading service.

With Santarus Inc.(NasdaqGS:SNTS), a specialty biopharmaceutical company, for example, the stock doubled quickly.

In fact, my readers picked up an initial 104% gain in less than five months.

When we doubled, I immediately alerted my readers to take a “Free Trade” and put in a 20% trailing stop on the other half. The trailing stop was set to protect gains on the remaining half by setting a price at which my readers would automatically exit.

No sooner did we take the Free Trade than the stock began to correct.

But I wasn’t worried. After all, we had recouped all our original investment by taking the Free Trade… so we made money no matter what happened.

Fortunately, the company then reported great earnings, and the stock quickly advanced. We’re now sitting on gains of 125% on the free portion of this trade.

In addition, I have the trailing stop set so that we make 100% on the amount we still hold no matter what happens. In other words, we double our money even if the stock were to crash tomorrow.

Sometimes gains can come even faster…

Take LIN TV Corp. (NYSE:TVL), for example, another company I recommended in my Radical Technology Profits trading service.

We held this digital TV play for only three months before it zoomed past 100%. 102.17% to be exact.

At the time, I told my readers to take a Free Trade and sell half the holdings so we can get all our original money back and let the rest of it run.

“From here on out we are playing on the house’s money,” I told them.

Since this was a volatile stock we had held for only a short time , I gave it the benefit of the doubt and extended my trailing stop to 25%.

Six weeks later on March 18th of this year, the stock corrected on heavy volume.

We still exited with blended gains of roughly 87.5% in 4.5 months. That’s an annual run rate of 252%.

So, as you can see, in both of these examples, our Free Trade allowed us to cover our costs and end up with pure profit.

A few moves like that can really juice up your portfolio.

Which is exactly what our goal is here at Strategic Tech Investor.

And right now, I have another technology play that could offer not one but multiple double your money free trade opportunities. The profit potential is stunning. In fact, I put together a special presentation to show you all the details. Just click here to learn more.

[Editor’s Note: I welcome your comments, questions and suggestions. Post a comment below … I look forward to hearing from you.]

9 Responses to How To Handle Your Really Big Gains

    • Michael Robinson says:

      Hi Dale,

      What a great question! Let me come right to the point. Except in rare cases, you should not have big hits like NVIV had with a one-day drop of 40%. I almost always tell people to use stop losses and trailing stops to protect against a sudden drop from big setbacks from a medical study, a CEO departure, etc.

      I generally go with a 20% stop loss. However, I will very rarely double that or suspend it altogether when there are certain reasons to do so for very specific stocks. Literally, I handle those on a case-by-case and make those decisions when there is a stock I want to hold for the long haul no matter what happens.

      Thanks for reaching out to me. I hope that helps,


  1. Marian Zieg says:

    I have been doing this. Jim Cramer recommends this too. How about those that are pretty speculative and are up 40-50%. I am tempted to do this on them too.

    • Michael Robinson says:

      Hi Marian,

      My rule is what you should always take gains whenever you are up 100%. Taking gains at half that rate works as well. That’s at your discretion and depends on a host of factors — your goals, investing profile, personality, market conditions and how fast the stock ran up.

      I have taken gains on half a position with anywhere from 40% to 75% gains depending on the circumstances in question. If the stock is heading down fast and you want to preserve some of the gains you built up that can be a valid reason as well.

      Cheers and best wishes,


  2. Capt. Jim says:

    Do you also use the “sell half at 100% profit” on options? I recently made a short term (5 weeks) profit on Apple of 700% and I am glad that I stayed in. I am out now and waiting for a correction before getting in again.

    • monique says:

      I enjoy reading your well written pieces on each recommendation
      What do you have on MEMS? to fight cancer and all other illnesses?

    • Michael Robinson says:

      Hi Capt. Jim,

      Very good question. Options are a different animal altogether. I normally recommend option trading only to advanced investors, like those in my Radical Technology Profits advisory service. I will say that with options you have more risk and a lot more upside. The 100% rule is for stocks. With options you can make that in two weeks or have the things expire worthless if they are deep out of the money.

      You sound pretty astute so I would say follow your own gut and experience on options. You may need to close at up 50%, 220% or as in this case with gains of 700% depending on the play in question. However, just so you know some options folks will close a position when they have X% gains, take the money and never look back. Again, that will depend on your experience, profile, market conditions, goals and risk tolerance. Hope that helps.

      Cheers and best wishes,


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