To: Poet who wrote (50 ) 7/25/1998 2:43:00 PM From: Mama Bear Respond to
Poet, I use an amount equal to 10% of my portfolio for my short term trading. This is all margin money. I also have an amount equal to 10% of my portfolio allocated for position short selling. Depending on how obvious the play is, you may find the entire 10% involved in one short term play. A good example is a fresh Asensio short sell recommendation. I rate the probability of a stock that has an Asensio short sell recommendation heading south from the point of that rec at nearly 100% in the immediate term. So the percentage of my trading money that I will commit to a short term play depends on how I rate the % possibility that the play will go the way I predict. and the market that the issue trades on. I find trading a Nasdaq issue raises the probability considerably that there will be a substantial DCB. If the stock gaps down 50% the probability of a jump after the open is considerably higher than if the stock opens down 10%. Then one must consider the direction of the overall market. In a weaker market DCB plays are usually not that strong. I managed to take 1/2 point from DOSE yesterday. I only bought a 1/2 position because of the weakness of the overall market. True to form, the mm's opened it at what would be the low for many hours. In a stronger market, it likely would have bounced to over 7, IMO. I also took my profits (1/2 point is 9% on a buy at 5 1/2) while they were there, and probably quicker than I would have in a strong market. I have found I make much more money when I don't get greedy.
