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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Marconi who wrote (10077)	6/16/1998 8:31:00 AM
From: Dale Baker	Read Replies (2) \| Respond to of 18691

Actually, boxing cuts your risk, along with any profit while you are boxed. If I short XYZ at 20 then box the position with a long at 20, my position is flat because my long goes up if my short goes against me and vice versa. So if XYZ goes to 40, I haven't lost or gained if I am boxed. It only helps if XYZ hits 40, I sell my long at the top and XYZ goes down again. Then it's just as if I shorted at 40 in the first place (the 20-point long position profit is in my pocket). The advantage Roger refers to is that you have a short position once the stock tops out. You don't wait for a big runup and find that everyone else has shorted all the available shares in the meantime. If I sell my long and XYZ keeps going up beyond 40, I start losing again by the amount it goes over my new "entry price" of 40.