Using Stop-Losses to Protect Your Profits After the Market's Rise

After all three of the major market indices put in gains of 9% to 12% from mid-October to the beginning of December, RealMoney Pro contributor Chris Versace says it's time for investors to consider managing the eventual pullback. Versace details risk management strategies like calls and puts, pair trades and stop-loss orders. He stresses that stop-loss orders are the simplest and easiest way to protect on the downside. As the stock price moves up, he says investors can ratchet up that stop-loss and turn their risk management strategy into a profit preservation one. Versace reveals that he recently set protective stops for Cisco Systems, Visa, American Water Works and United Natural Foods, all of which he believes could be worth a look for other investors.