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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (105133)	4/13/2000 3:10:00 PM
From: 5dave22	Respond to of 1575424

Tim, I couldn't tell you - I don't make a practice of it. I've lost twice and won once. The two losses were 30% & 50% loss, but the third was Iridium. :) Dave

To: TimF who wrote (105133)	4/13/2000 3:28:00 PM
From: that_crazy_doug	Read Replies (1) \| Respond to of 1575424

<< At that point I was fairly certain it would go down too, and was thinking about buying puts or shorting it. A question about shorts - I understand you are effectively borrowing stock to sell and then buying it back later (hopefully at a lower price) to pay aback the share. But when do you have to buy it back? If you shorted RMBS and had to buy it back before its drop then you would lose money. >> My apologies if you were being rhetorical, but in case you're not: If you short a stock there is no set time when you have to buy it back. However, if the stock goes up past a certain amount it basically puts you under margin. For example, if I shorted intel 10 years ago and didn't buy it back it'd be worth 10x the money of the short. I believe this would be fine as long as I had 10x the value in my portfolio to cover the short position. Once you can no longer cover it then it works like a margin call and your broker starts selling everything you own to buy back in. In my opinion it's just lunacy to short anything. The most you can make is 100% (company going to zero) and have more or less infinite risk (no limit to the value of a company). You may be right to short something like rambus, but if momentum players, false news, day traders or whatever push the stock past your threshold before it breaks you get stuck holding the bag. Also, you can probably find a company to go long on and reverse your odds (loss limited to investment, gain unlimited) and do much better for yourself. At least if you buy puts you can make huge gains, and you can limit your loss to your investment. Just my 2c.

To: TimF who wrote (105133)	4/13/2000 5:58:00 PM
From: tejek	Read Replies (2) \| Respond to of 1575424

But when do you have to buy it back? If you shorted RMBS and had to buy it back before its drop then you would lose money. Tim, Yes, you could lose potentially a lot of money. I see that doug has explained shorting but let me add one more thing. I don't short stocks but if I did, I would only short stocks of companies that have very good fundamentals and where the stock is shortable only because it is over extended. The reason for that is pretty obvious......if you end up buying the shorted shares, at least they are of a good company. ted

To: TimF who wrote (105133)	4/13/2000 7:38:00 PM
From: brushwud	Respond to of 1575424

A question about shorts - ... when do you have to buy it back? One detail no one has mentioned yet is that your broker may need to return the borrowed stock at any time. In most cases they'll replace it (by borrowing from someone else) without even bothering you, but in situations where a lot of the available stock has been shorted (like Rambus), it may not be possible. And then, you're dead. BTW, a question that has always amused me is, who votes the shares bought from a short seller? Say A owns some stock, B borrows from A and shorts it, and C buys from B. Both A & C think they own it and show up at the shareholders meeting. Who gets to vote the shares? (My guess is that A gets a surprise and makes a note to keep his shares in a cash account rather than a margin account next time.)