Hi Dany,
Though there was obviously a ton of money to be made shorting some of the nets recently, and though even GNET took a temporary dive, short selling is risky business unless you can stay right on top of your position at all times. One positive PR, upgrade, etc... and you could lose your shirt in an instant! <g>
I also would strongly discourage anyone from shorting a stock (like GNET) which is going to blow away earnings in a few weeks. <gg> Yes, it can't go straight up and there will be some dips on the way to infinity ;) but again, it's very risky to play with dynamite. :) Much better to be shorting companies with high P/Es that aren't actually making money and are just flying high along with the sector but have no inherent merits. ;)
If you are still inclined to short GNET (TRAITOR!! LOL...), I would strongly suggest you buy puts instead. This is the same strategy but much safer and your margin requirements would be substantially lower due to the small outlay of principal with options vs. long positions. Of course, you'd need to meet your brokerage firm's option trading specs to play and options themselves are very risky and you can lose your shirt on 'em as well. <g>
With puts though, your loss is limited to your premium plus commission and though they do not move point by point (typical for out of the money calls/puts), it is a safer way to take advantage of downslides. Conversely, a short position has a potential for an infinite loss. In fact, carrying a put 'insurance premium' on your long positions is never a bad idea particularly when you have a hunch that the market will turn unfavorably, earnings might disappoint or not be received well, etc. provided that you can tolerate the premiums. Personally, given GNET's future, I'd be more inclined to sell naked puts than go long the put right now, but that's another topic... LOL
Did you ever find the Bullfrog Sunscreen? <gg>
Best,
V. |
