Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Bid Buster who wrote (89269)	4/29/2004 12:38:30 PM
From: im a survivor	Read Replies (2) \| Respond to of 93625

<<You can't short without a margin acct...have to have collateral to borrow stock...the same way you have to have collateral to borrow money from a bank. While its been said you can suffer unlimited losses by shorting i say hogwash...you use stops just like any long trade to limit your losses...for example if i'm short a $10 stock and it runs to $15 my loss is no grater than if i'm long a $10 stock that drops to $5 >> Agreed, and although I dont short, most all my trading accounts are margin accounts.....I just think too many people 'misuse' margin and it leads to trouble...For instance, in 03 I was taking profits and raising cash all year while everything I sold continued up....friends maxed out on margin were making a killing....some were smart and took profits at end of 03 beginning 04......some did not.....those that did not have lost most of 03's gains and have no 'buying power'....... So, as Don said, as long as you are cautious.......

To: Bid Buster who wrote (89269)	4/29/2004 10:44:11 PM
From: Bilow	Read Replies (2) \| Respond to of 93625

Hi bid_buster; Re: "While its been said you can suffer unlimited losses by shorting i say hogwash...you use stops just like any long trade to limit your losses...for example if i'm short a $10 stock and it runs to $15 my loss is no grater than if i'm long a $10 stock that drops to $5." The problem is big gaps. What if it closes one day at $14, and opens the next at $140? The past history of the stock market includes some nasty gap ups, and the future undoubtedly holds more. But at the present price, I doubt that the 'bus will do an overnight 10x. I seem to recall an overnight 1.5x on Rambus though. You probably have better stock pricing programs available. Look at the late June 2000 price data for closing and opening prices. The current situation has some of the same dangers. If Infineon or Micron suddenly chose to sign, the 'bus would explode upwards. Rambus has a history of cutting deals that are not nearly as good as they look on the surface. If they end their litigation with someone, even if it is on terms quite unfavorable to them, they will undoubtedly put out a press release that paints them as being the victor. That could bump the stock higher for long enough for you to be stopped or margined out of a winning position with a loss much larger than the worst you planned. Best of luck. -- Carl P.S. Cordob's idea of using calls to avoid gap ups works the vast majority of the time.