Position sizing:
The filing of a securities‑class‑action lawsuit is a material negative catalyst for REPL and will likely trigger a short‑bias sentiment swing, especially among risk‑averse investors. In a risk‑managed approach you should scale back any long exposure to a fraction of your normal allocation—typically 25‑50 % of the original position size—until the legal risk is priced out or the case’s trajectory becomes clearer. If you already hold a short position, you can increase the size modestly (e.g., 10‑15 % of your total capital) to capture the upside of a potential sell‑off, but keep the overall exposure within your daily volatility budget (e.g., ≤2 % of equity per trade).
Stop‑loss levels:
Given the heightened uncertainty, tighten your stop‑loss to protect against a rapid reversal if the market digests the lawsuit without a steep sell‑off. For a long side, set a trailing stop just below the most recent swing low or the 20‑day moving average (≈3‑5 % below entry) rather than the wider 10‑15 % range you might use in a normal environment. For a short side, place the stop just above the nearest resistance or the 20‑day high (again, a 3‑5 % buffer). This tighter stop‑loss reflects the expected increase in volatility and the need to limit downside if the legal news is absorbed more positively than anticipated.
Bottom line: Reduce long exposure, modestly increase short exposure, and tighten stops to a 3‑5 % buffer around key technical levels to stay protected while still allowing the market to price the lawsuit’s impact.