To: Mark_H who wrote (48 ) 5/21/1998 12:42:00 PM From: DScottD Read Replies (2) | Respond to of 293
It can be very confusing. See, there are two types of shorts, covered shorts and naked shorts. Covered shorts, as the name implies, are shorts that are covered. Generally by a pair of pants, perhaps a robe, or, in the most complicated scenario, another pair of shorts. In which case you would be covering your short with a short. Difficult but not impossible, especially if you use harriman's broker. See the Curious George thread if you're curious. Now, if you remove the covering, you have naked shorts. These naked shorts can be brief(s), which are utilized when your stock is cratering, or boxers, which are best used in a hostile takeover situation or when you have been coming empty with your brief naked shorts and need a little more room to make sure you quit shooting blanks. Once the stock has plummeted to the target price, you remove the naked shorts, collect your profits and ask out the cute girl in the secretarial pool who you have had your eyes on for a long time but knew she would only go out with you if you were rich and now you are with the 10 grand you made when you removed the naked short so you spend a weekend up in the catskills with nothing but the cute stenographer and a couple of cases of rolling rock and you get good and drunk and get it on with the stenographer for three days only to return to manhattan on monday to find that your broker stuck it to you and forgot to cover the naked short and now cube is back up to 34 and the stenographer hates you because you spilled beer all over her nice silk panties and you get a margin call and its all a mess but you chalk it up to experience and go long on cube, only to hold it too long because you got too greedy and your boss is pissed at you because you call his broker too much and the deli forgot to include a pickle with his pastrami sandwich so you go home and drink more beer and dream about that spectacular weekend up in the mountains with the stenographer who is now mad at you and it all happened because you trusted your broker because he drives a bmw and all you have is an old schwinn 5 speed with worn out brakes. That in a nutshell tells you all you need to know about naked shorts.