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Strategies & Market Trends : Stock Mania ! - Mutual Funds that can short.
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To: Tomsr who wrote (92)5/11/1998 3:46:00 AM
From: dumbmoney  Read Replies (1) of 129
 
If I short a $10 stock or mutual fund, and it goes to $5, do I make 50% or 100%?

I prefer to say 50% (as in, you made 50% of the value of the shorted stock in profit).

If you're trying to answer the question, "what is the return on my investment?", that's a little tricky. When shorting you invest nothing (no cash is consumed) and everything (your financial liability is unlimited). So you can't really figure ROI without getting into the specifics (how much risk am I really assuming, what is the opportunity cost of using margin, etc).
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