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Technology Stocks : Data Dimensions
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To: TA Trader who wrote (2190)7/17/1997 1:09:00 PM
From: taxikid   of 4571
 
again you fail to see it. there is a quantitive and finite "top"
most traders have a set limit to cut off their losses. on the short side- it is quite dangerous because many times one cannot put a stop loss{cover} in. so he has to either roll with potential punches or leave adequate reserves for this phenomenon.
also short sellers often hedge with cheap out of the money CALLS.
this can be advantageous in many facets- but now is not the place for me to detail it for you.
I don't think that you grasp the concept that most short sellers have done a lot of work and are willing to wait as long as it takes.
btw- there is a less than "zero" it is called being delisted and then
becoming insolvent and ultimately dissolved.
so when one averages down one gets to lose all of his cash-when stock =0.
a short can get margined out and the broker forces him to keep about 40% of his cash. when a company goes to 0- after being halted- one cannot sell his long position.
but the short will get margined[out on his way to the infinite}-
i also would love to see the stock tables in wsj- {"MSFT hits new high- 155 squared}
best of luck- stop reading those investor 101/"HOW TO MAKE MONEY I THE STOCK MARKET" BOOKS.
BTW- i didn't claim your ignorance- you did by posting what you did.

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