Well, here we are not too far away from seeing our small cap stock pick Enigma Software (ENGM) begin trading following our suggestion and profile launch. I suspect the collective efforts of our readers (who chose to own it) will have an evident impact on pricing. So, I think it’s important we lay out some basic defensive measures and stock trading strategies just in case ENGM gets a red hot start right out of the gate. After all, while I want ENGM to go higher, I want everyone to get good fills even more.

First, I think a buy-limit is on order, especially if we see this thing gap up in the morning. I think 24 cents may be a decent cap for starters. Where’d I get 24 cents? That was the high/peak from last month. It may not be right, but better safe than sorry. If it’s clear by later in the session that you can’t get a fill at or under 24 cents, then you can make an appropriate adjustment.

Second, maybe the right answer is to not even try and get in first thing in the morning. Let everybody else duke it out when volatility is high. Then once all the dust has settled, step in and do your thing.

In both cases, the risk you run is not getting filled at all early on, only to see Enigma shares inch higher all day long. However, I really do think that’s the lesser risk here. The bigger risk is jumping in too soon, at a not-so-great level.

As always, it’s your call. If something significant changes within the first few minutes of trading, I’ll post a another blog entry.

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