For instance, one could, instead of taking a profit from a long position, after a run up, thus closing out, just sell from the short account. And conversly could, instead of covering a short after a drop, just keep the short and go long.Am I getting it?
Yes, yes, Taylor, very much so and I call it the "sweet box". Box-trading is no more than to "manipulate" the "circumstances". Amzn's "circumstance/strength" is it's "volatility", volatile in scope and in frequency.
Box trading is an "on-going", time-consuming process. If you have a "large" portfolio, are familiar with it's trading patterns, "treating" a small box carries minimum risk with reasonable returns most of the days and opportunity for "larger" returns occassionally. For example, last month I opened(sold) 200 shares at $189, closed 125 shares on the same day, but closed the other 75 shares at $131.
One can "upgrade" the box from time to times too. For example, if Amzn goes to $160 or $80, we can short/buy additional shares and try to form a new box(or adjust the size of the existing one). Flexibility is the key here too. |
