Quote:
Originally Posted by Cowperson
If you're a naked short, the theoretical possibility of loss is infinite and not limited to the amount of money in the account.
Your ideas may make perfect sense but the market isn't always efficient or as smart as you are.
There are stories from the late 1990's, as an example, of smart people losing everything because they thought the market was overvalued and due for a huge fall . . . . . . ultimately, they were right but were broke and forced off their positions too soon, at huge losses, because of "irrational exuberance" when the market kept climbing.
Have control of your potential downside.
Cowperson
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Thank you!
If I decide to be foolish and continue on this quest, for control of my potential downside - how liquid is this process (excuse the possibility of the incorrect term used there). Would I be able to pay back the margin and get out easily if I started loosing to much, or would there be a set term length?
Kavy