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URL:  http://boards.fool.com/newby-qs-on-short-selling-as-a-price-freeze-etc-29927484.aspx

Subject:  Newby Qs on short-selling as a price-freeze etc. Date:  3/22/2012  2:17 AM
Author:  krystoff Number:  44559 of 44621

Hello friends of the CAPS "Shorting Stocks" forum. I only started short-selling last week. (Wish me luck!) And I am not here today to discuss my shorting strategy. Instead, I have some basic newby questions about short-selling itself. Thank you anyone for any help.

1. ISN'T IT BETTER TO SHORT AN ETF THAN TO BUY AN INVERSE ETF--BECAUSE SHORTING HAS NO SIGNIFICANT FEES?
2. IS IT FEASIBLE TO USE TRADITIONAL SHORT-SELLING TO FREEZE THE VALUE OF PHYSICAL GOLD ASSETS? (& SILVER & PLATINUM.)
3. ARE OPTIONS BETTER THAN SHORT-SELLING FOR THE PRICE-FREEZING OF ASSETS?



1. ISN'T IT BETTER TO SHORT AN ETF THAN TO BUY AN INVERSE ETF--BECAUSE SHORTING HAS NO SIGNIFICANT FEES?

As everyone knows, an inverse ETF is inefficient. Over a year, it will often end up -10% lower than the true inverse. It is only "maybe" useful for short-term trading. And even in that case, isn't it better to use another method which does not carry the -10% annually? I want that 10% annually to go into my pocket, not into overhead. It seems to me, the only downside to short-selling vs. inverse ETF is that you can lose more than you expect. However this seems virtually impossible when shorting an entire index, which is never going anywhere very quickly.

I.e., it seems to me that an 'inverse ETF' is like playing poker at a casino with a huge 'table fee'. Win or lose, you must pay this added cost. Shorting an ETF is th