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Strategies & Market Trends : Z Best Place to Talk Stocks
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To: Big Brother who wrote (14227)5/9/1998 9:11:00 PM
From: Chuck Stoafer  Read Replies (2) of 53068
 
RE: short limits

Hi Big Brother,

Seems we went to different business schools.

A stock short is limited to 100%. Think about it as follows:

I short 1 share of Bre-X at 1.00 and it goes to 0. That's 100% gain.

I short 1 share at 1.00 and buy to cover at .50 That's a 50% gain.

My gain was limited to the stock going to 0 or 100%.

Now look at a long buy (complete opposite)

I buy 1 share of Bre-X at 1.00 and it goes to 0. That's 100% loss.
I am limited to 100% loss.

I buy 1 share at 1.00 and sell at 2.00 - That's 100% gain.

I buy 1 share at 1.00 and it goes to the moon - that's a nice little gain and is unlimited.

anyway - hope this may help clear things up and am sure Ron M. will agree with this.

Very good trading to you and all on the thread,

Chuck
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