Integral, Only chance you have is kissing some SERIOUS @SS!!
The only hope of finding out what the "most popular personalities on SI" are doing regarding their risk management techniques is to get on the Private Message list. There they will discus strategies to misconstrue facts, post URL's of no significance, and generally misquote, misdirect and misrepresent any available thought. Oh, and if you are on the real insiders list here, and considered among the MAJOR Personalities here on SI, you may get the double secret handshake and actually hear the truth.
The "personalities" that are feeding you this rubbish have NO NET POSITION in this stock. They are using you and guys like you to turn the momentum around during a time of potential (wouldn't want Dave turning me in to the SEC by saying definite) breaking news. If you can do it, and there is no news, then GREAT for them. They used your capital and convinced you to take all of the inherent risk, allowing them to come in later and gain from your work. If there is news (clearly what I believe to be forthcoming VERY soon), then they will sit back and watch those OUT of the inner circle blow their (obviously not you, since you have stated the relatively small position which you are short) accounts up. They will then either disappear or profess to have been brilliant for having no net position, as they are doing already, to some smaller degree.
You want strategy. Now that's the "popular SI personalities" strategy!!
Here is mine:
I have said repeatedly that the best way to play this, either long or short, is to use options to hedge your position. Decide what your risk tolerance is, determine what it will cost over the next few months to buy the options (calls in your case) and let that determine what strike price you must purchase. It's not rocket science, but if you take my advice...DON'T MENTION IT HERE! These guys will blast you for not having conviction in your position. They will tell you that you are creating synthetic long positions (whatever that was suppose to mean) or that you are a traitor to the short cause. Of course it hurts them when you and the others hedge as they have already done, so consider the source of their admonishments.
Capital Allocation is a much more personalized process. Your own risk tolerance and objectives must be considered. Some of these guys seem to be Kamikazes, others seem more disciplined. By using proper hedging techniques (as opposed to boxing your short position which will give you No Net Position as the major SI personalities are currently doing) you can limit your losses without an equal limitation of your gain. If you are right, then what difference does it really make to you if you spend 5 or 10 points hedging over the next few months. If you are wrong, then it may well save you more than you currently believe your risk to be when ZIX starts to really move on news.
I would watch USMA if I were you, and willing to trade in and out of this stock. He's the only one making money on both sides that I can see. Use common sense, when the heat is turned on get out of the way. Good luck in your trading.
Enjoy the ride!! |
