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I do think my original point is being missed. Yes, the dollar cost of a given point move is the same for both long and short. But in your example suppose you weren't stopped out. At 10:31, one $90,000 account has a $40,000 long position; the other has a $60,000 short position. Forget history; just evaluate the 10:31 situations as if they had just been entered from accounts that were previously flat (from $90,000 cash). Other things being equal, for a $90,000 account which is riskier: the $40,000 position or the $60,000 position? If you agree that the $60,000 position is riskier (not because it's a short, but because it is larger) I think the point is made. That point, again, is that as short positions accrue unrealized losses they become a larger proportion of one's portfolio, while long positions become a smaller proportion. |
