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Old 06-13-2011, 11:50 AM   #23
Slava
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Join Date: Dec 2006
Location: Calgary, Alberta
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Quote:
Originally Posted by Kavy View Post
I am extremely over my head !, but I do want to learn, so I figured this is a good place to gather thoughts and opinions.
Have you done a fair amount of investing, and just going "long"? You downside is more limited here (and even in that case a lot of people have lost a fair amount!). As Cowperson noted before you potentially have an unlimited loss when you short. Here is how that works:

A) You buy some shares for say $1,000 and go "long". The stock tanks and you lose your $1,000 entirely. Sucks, but it was $1,000.

B) You short stocks for $1,000. The stock never drops and continues to increase in value. Sure its unlikely....but as the stock increases you're on the hook for more and more....
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