SEC’s Levitt Adds to Internet Stock Warnings

Bloomberg News

Securities and Exchange Commission Chairman Arthur Levitt has joined the chorus warning about the perils of Internet stocks.

“Online investors should remember that it is just as easy, if not more so, to lose money through the click of a button as it is to make it,” he said. His remarks come in the wake of dramatic volatility in Net stocks recently.

Levitt suggested investors use “limit” orders, setting maximum purchase prices, rather than market orders when submitting a trade in a hot stock. This is to avoid paying far more than expected for a stock whose value moves sharply while an order is under execution.