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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (100853)	1/19/2008 1:24:53 PM
From: Lizzie Tudor	Respond to of 306849

the thing is I have been bearish on all these home stocks for a long time but it is a lot harder making money on a stock that goes down like NFI from 400-1 than it is on a stock that goes up from 25 to 250. You don't want to actually short at the top, thats not enough leverage. They have puts but usually not that far down/out. You have to constantly keep rolling the puts and there is always that chance of a spike up. As opposed to a stock that goes up a few hundred points, you just buy on margin and wait or buy calls and wait. The calls typically go further out of the money than the puts. And there have been numerous stocks that have gone up multifold like this in the time NFI crashed... rimm, aapl, bidu to name a few.