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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA
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To: mishedlo who wrote (15555)12/13/2002 12:26:33 AM
From: Joseph Silent  Read Replies (1) of 19219
 
Mish, the problem

is that the terms "long" and "short" have not been defined precisely. Until that is done, you may both consider yourselves right, depending on what you have in mind.

In your example, you make the implicit assumption that when you sell short, the market-maker buys -- hence there is no "new" long, besides the original 10 share owner. In reality, even if the buyer is only the market-maker, he/she now becomes long 10 shares, apart from the 10 you own. In this way there are 20 shares held long and 10 short.
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