Ed re: specific short plays....
I learned long ago... especially in smaller caps like TMR, RRC, KWK not to give away specific stocks I'm still trading...(vbg).
There's 3 small caps...
I always short a basket...I like a balance of puts & shorts and NEVER, NEVER, EVER get greedy.
I manage my profits on the short side, just like I do on the long side.
If I make a nice quick 10-15% downside hit - I may lean into the move heavier as I am doing presently, or I may close out my shorts... take 20%/50% of my profit and ladder some outlying "puts" - which become "0" cost to me... give me some further downside leverage, but limit my risk and leverage my cash available to come back in long, or short again.
On the Short side... you can play the pureplay Nat Gas names given our exit of the Nat Gas Heating Season here... and I am doing that.
Or, you can play the heavilly weighted Oil vs Gas names like BRY - I am short BRY here as a heavilly levered Crude play as I think Crude is looking like an interim double top here.
In E&P's - I'm playing those highly levered to Crude and Nat Gas...vs. those that are balanced between Oil and Gas. Given how commodities move... I may add, or keep only one, or the other...Short Crude plays/Long Gas, or vice versa...it changes daily/weekly.
I use the same metric's to pick my shorts as I do my longs.
- Take the most followed Analyst Reports - which companies have run the most that have the least remaining %Appreciation potential to Target Price ?
- Which have the highest PV-10 Valuations & little room for execution error ?
- Which companies have the least attractive Production/Reserve Replacement expectations ?
- Which have the highest Enterprise Value : Proved Reserves: Reserve Life metric's.
...we all have our own screens....it's not hard to see which individual plays have broken out and are a bit over-extended.
- Which have the highest following of small speculators ? - these threads over time will have given you those names...and those are my favorite shorting stocks.
That's just a few E&P ideas...
Same for the OSX plays... KEG has a huge indivual spec following... I'm short it.
PDE has a heavy debt load... I'm short it.
ATW is already at historic past cycle levels - I'm short it.
...that's a partial list.
I like Crude Oil itself as a short here... many don't play futures, or commodities themselves...so that's irrelevant to many.
It changes daily... caveat emptor.
99% of people should NEVER SHORT.
- CAVEAT EMPTOR x 2
...I'll repeat... 99% of people should NEVER short.
If you are just begining to short... it should be with Put's imho. |
