I've been trying to follow the commentary about short-selling and I've just got more questions than answers. The objective is to make money, it's the process that I'm not following. What follows are a couple of links to some posts where some amplification would really help.Post #1http://boards.fool.com/Message.asp?mid=16429358"When I look at a stock to short I want it moving down! I don't try and catch the top." - JeanWaPost #2http://boards.fool.com/Message.asp?mid=16471772"...study the chart of a stock called ADSP on the Wednesday and Friday around Thanksgiving in 1999. The stock started at $3. By mid-day Wednesday it was around $9--up 300% in hours... That's when I started shorting it. And I planned on doubling up if the stock went up by 50%. If by some amazing chance the stock doubled from my entry, then I would double up again. Well, this is what happened. Three hours after I first shorted it, the stock was at $13.50. The next trading day, Friday, pre-market, the stock was at $18. I now had nine times the number of shares at twice the price (doubled up at 13.50 and doubled that amount again at $18). So my exposure was now 18 times, yes 18 times, my original investment. An hour later the stock was at $56. You read that right. In less than one trading day a worthless stock had gone up 1900%... My position size was now about 200 times the original short amount."- MarkLehThe excerpts of these two posts seem to contradict each other. What concept am I not grasping here? It seems to me that Mark is doubling his shares (i.e. investing more) as the price doubles. But JeanWa is interested in the stock as it is tanking. That said, would KM be a good candidate for short-selling why or why not?Thanks,JJ
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