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.

Strategies & Market Trends : Stochastics -- Ignore unavailable to you. Want to Upgrade?

To: Kip518 who wrote (294)	3/2/1998 11:18:00 AM
From: R. Gordon	Respond to of 927

Kip, Yes, $2 is $2 - I've got nothing up my sleeve.ggggg I know it sounds a bit crazy on the surface, but just think about it. If you invest $10,000 and buy at 5 you have 2000 shares, and if you sell at 7 you have gained 40% on your investment. 2/5=.4 --- You now have $4000 profit. If you invest $10,000 and sell to open at 7 you have 1428 shares (forget about odd lots) - buy back at 5, you have gained 28.57%. 2/7=.2857. On the play you have made $2,856 or 1428 x 2. The most you can make shorting is your original investment. If you buy at 5 and it goes to 0 you have made 5 which is doubling your investment. If you buy at 5 and it goes above 10 you have more than doubled your money. It's just math. I have a prejudice to short stocks - but studying the numbers I realized that the percentage of gain shorting is not equal to the gains going long. Perhaps I a missing something. gggg Good luck, Richard