Anthony @ Equity Investigations, Dear Anthony, Message Board

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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: If only I'd held who wrote (37884)	6/7/1999 3:32:00 PM
From: TripleT	Read Replies (2) of 122087

Your analysis is true only in as far as it goes. If, for instance, a person set ups a margin account with cash to be used only for shorting, the profit could approach 285%. Consider a stock worth $10.00 per share. My broker would require $5 per share to short this stock from up-front money. Consider the following two examples: 1) If the stock drops to $5, then my profit is 100%. 2) If the stock drops to $0.00 then the profit is 200% Once a stock is shorted, the broker only requires residual margins of 35% giving a possibility of 285% profit (dangerous, very dangerous). Stock costs $10. Requiring $5.00 up-front money and an investor may short more stock, leaving only $3.50 per share margin (cash in his account). Provided of course, that he enjoys skating on thin ice. OK Ok so it requires you change definitions a bit. But what I consider in any small business is cash flow. Long live the king. Happy skating, all. :^) TTT

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