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Gold/Mining/Energy : GDXJ - Market Vectors Junior Gold Miners Index
GDXJ 93.63-1.4%Oct 31 5:00 PM EST
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To: TheSlowLane who wrote (98)11/13/2009 12:59:48 PM
From: Tommaso  Read Replies (2) of 196
 
Look at the arithmetic:

A person shorts 1000 shares of GDXJ.

If it goes to zero, they make about $25,000.

If goes to 50, they lose $25,000.

Which outcome is more likely?

A more probable situation is that they put up $12,500 margin for the short position and get sold out by their broker, losing most of their "investment" as the stock rises 10 points.
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