Dorsey Wright & Associates. Point and Figure Message Board

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Non-Tech : Dorsey Wright & Associates. Point and Figure

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To: J.B.C. who wrote (7998)	5/18/2000 6:55:00 AM
From: Tommy Dorsey	Read Replies (1) of 9427

JBC, in shorting keep in mind that in most cases you begin to probe. It is best to short 1-3 of your total and add on subsequent sell signals as they develop. In the intel short it its still below the trend line but was stopped on the buy signal. This does not mean the play is over. You go back to the sidelines and prepare to short on the next sell signal that developes or at least on the reversal up after the sell signals. Sometimes it takes several times to probe, to find a trend. Another idea is with puts. Lets say an at the money put has a delta of .5 (will move 1-2 point with each point move in the underlying stock). You would buy two puts with .5 delta to equal shorting 100 shares. If you are right and the stock declines the Delta's will begin to expand as the stock goes in-the-money. This will in short order have two .75 deltas working for you in relation to 100 shares. In otherwords 1 1-2 points going for you for each 1 point in teh stock. If the stock declines deeper in the money the delta can go to 1 where you would have two points going for you in relation to one point if you shorted the stock. T

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