Auric, thanks so much for your comprehensive answers to a newbie's questions. But, as always, that leads to yet new questions. <g>
You say:
The trick is to watch the liquidty in terms of volume, bid/ask spreads, average size transacted as well as the number of active market makers in the stock, among other
things.
At any given time of day, Yahoo, for example, provides current data on the above (except for the "active market makers"). But I gather you are talking about tracking the data, on an ongoing basis throughout the day/week. Wouldn't I need some fancy trading software program to do that? If so, which?
And now for a question that really shows my ignorance! (Remember, you are dealing with a reformed buy-and-hold investor type.) What exactly are <gulp!> "active market makers"? And how do you track them?
Can you recommend some good reading material on the subject of shorting? I have ordered (through Amazon, which I haven't the heart to short, although it "deserves" it) Kathyrn Staley's book, The Art of Short Selling. I gather it is terribly out of date, even though it was published only three years ago. But there does not appear to be anything else.
I know a greenhorn like myself, under normal circumstances, should wait to learn a little more before plunging into the uncertain seas of shorting. But these are not normal circumstances, and it is not in my nature to sit calmly and watch, without fighting back, while my long investments (none of which are no-goodniks, by the way) sink beneath those very same seas.
jbe |
