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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Matthew Tyson who wrote (19664)	3/11/1999 2:47:00 PM
From: Aegis_61	Read Replies (2) \| Respond to of 122087

Matt, I don't mean to sound thick about this or be a stickler, but why are return percentages calculated that way when the investment is a short? I get your short sale return % calculated like this: (short sale price - cover price)/(short sale price) In that way you can never go above 100%. Whereas if you bought a stock the formula for return % would be: (sale price - purchase price)/(purchase price) I've always wondered that, since shorting is (hopefully) like buying low and selling high... Just in reverse. So if you use your formula and short a stock at $40 and cover at $20, you'd get 50%, however; If you bought that same stock at $20 and later sold it at $40, you'd have gotten 100% return. See what I mean? If the answer is "that's just the way it's done" I can understand that, but it just seems inconsistent to me. Thanks. Sincerely, Aegis