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Strategies & Market Trends : Roger's 1998 Short Picks
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To: Roger A. Babb who wrote (10005)6/15/1998 2:32:00 PM
From: Marconi  Read Replies (1) of 18691
 
Hello Mr. Babb:
ZITL " caused by shorts, not covering, but boxing with long positions"
Please detail what you mean by boxing with long positions. I am interpreting this as say an initial short at 20, a boxed cover at 40 (by buying shares to cover the short at 20), then 'borrowing' your own shares that were bought at 40 to sell short at a higher price--say 72 for ZITL. Effectively, if the stock goes in a single long rise, the composite of these transactions is a short position closer to the peak in price, but also missing some gaps in the dollar gain due to the hit taken by the losing box with the long position taken at 40 in this example? In other words, the boxing long is boxing a loss in anticipation of taking advantage of an anticipated future stock price. And the converse of mis-estimating such a rise is that a loss is locked in. Do I understand correctly, or if not, please correct me.
Best regards,
m
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