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Strategies & Market Trends : ZenWarrior's Trading Paradise -- Ignore unavailable to you. Want to Upgrade?

To: p40warhawk who wrote (283)	4/3/2001 5:01:09 AM
From: tanstfl	Read Replies (1) \| Respond to of 2462

Been lurking on the Dr. Bob board for a long time and am enjoying the repartee on this board. With that in mind, couldn't resist parleying the "shorting" parody into the long juxtaposition. A long finds an undervalued stock and holds it until it is overvalued and ready to fall and then sells it to the "greater fool". Actually, I have no preference long or short. I just like to make money. Just not as nimble as you guys so I hold over night. Currently have 30 QQQ 44 puts bought at 5.80; long 1K QQQ's at 43.5; sold 10 QQQ APR 39 Calls for 5.10 and shorted 2K QQQ at 43.1 and covered at 39.9; and short 1K QQQ at 39.1. Bought 1K NTAP at 24, sold 10 Jan 03 20 calls for 11, shorted and covered 1K twice between 18 and 22 for 4K total. Short 50 MFNX APR 12 1/2 puts at 7.25 (Wanted to capture any upside and still get it at 5 1/4). Anyway, I'm not doing as well as the pure daytraders but getting by. I'm sure I had a focus when I started this ... Oh yea, wanted to have fun with the caricatures and then devolved into regurgitating what Flack said about trading where the money is; long or short. Checked out KLAC. My VERY amateur TA is that I would be buying puts if it hits 31. Looks like an attempted breakout stalled just below 48 and then all my indicators went pretty negative. Great boards, by the way, and I bring this up not as criticism but to further the learning discourse. Best, Steve

To: p40warhawk who wrote (283)	4/3/2001 10:47:00 AM
From: FLACK	Read Replies (1) \| Respond to of 2462

p40 >>Shorting Let's see if I understand this shorting business correctly. First you borrow a stock that you don't want and immediately sell it for more than you think it is worth. Then you root for disaster to hit that stock so that you can buy it back cheaper and repay your creditor with less than you borrowed. Is that somewhere in the ballpart? p40warhawk<< That's pretty much it... you borrow the stock from someone who thinks you're crazy, because they think it's going to go UP. This is the "game" you and I have talked about many times... even though you don't agree that it is a game. While shorting is an available option to anyone, it's the black sheep of the market... and that's the way the institutions want to keep it. It's their tool and they say and do everything they can to convince the retail investor that it's dangerous, evil, and no decent, right-minded person should even consider it as a trading option. Do they ever recommend that we should sell? Nope. They want more and more of our money in the market so they can do their "game". It's our job to learn all the rules of the game, which includes shorting. That doesn't mean that we HAVE TO short. It simply means that we better understand the principle and how the institutions manipulate the market.

To: p40warhawk who wrote (283)	4/3/2001 11:13:57 AM
From: manfmnantucket	Read Replies (1) \| Respond to of 2462

pea fourty, re shorting manoman, your posts is full of value judgements! First, FLACK has a nice treatise that he reposts from time to time about how to short... but anyone involved in the market should understand the basic idea. >First you borrow a stock that you don't want and immediately sell it for more than you think it is worth. I'd disagree. First, it makes little difference what you think it's worth. All you need is an expectation that its price will decline. So, you can short stocks that you think are "worth lots more". Since there is no inherent ROI other than the price change, and the company doesn't get anything from it, it's a trade, not an investment, in my book - you must cash out to realize any gain. You may expect the price to decline because of a "market thingy", as we've had for the past year, where prices are diving on average. Or, based on some notion of "good" or "bad" or "valuation". Whatever. >Then you root for disaster to hit that stock so disaster? well, no - you root for something to push the trading price down, which happens, as you have observed, even while things go well, regardless of our hopes, fears, or political views ;-) It could simply be a readjustment of how folks calculate "valuation". But when disaster is in the air already, as it has been for companies this past year, it's a losing bet that prices will rise. We typically want to use capital to make winning bets, not statements about our beliefs or our bravery. So, to make money you try to sell high and buy back lower, pocketing the difference. You repay the same number of shares you borrowed to your creditor, who was going to hold them anyway. does that say it? wow, the NASDAQ just broke below 1700, in keeping with its chart trend. For whatever reason, people are certainly in a mood to sell today, almost all the stocks on my screen are red. Odds strongly favor short positions this AM! MfN