Shorting a Stock

[henry07]

i would stay away from that if i were you. U need to know what you are doing. also you have to be careful of the 2x and 3x ultrafunds as they go down twice and three times faster and harder if the market decides to violently go upwards and vice versa. There are alot of uncertainty out there right now and would be smart to raise cash and wait for a sustained trend

[Kavvy]

Originally Posted by Slava

I don't short stocks, so let me say that as a disclaimer of sorts. To be honest though some people that I know who are short-sellers are probably some of the most fundamental that I know (as in concerned about business fundamentals, not as in fundamentalists). I just point that out to say that you might be in over your head a bit here?

I hope that doesn't come across as my bieng rude or ignorant because I really don't know you and have no idea about your investing experience. I just make that comment from reading through this thread and as a guy who talks to investors a lot...FWIW.

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.

[Slava]

Originally Posted by Kavy

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....

[Kavvy]

Originally Posted by Slava

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....

Thank you for all the comments.

I would like to bet on a stock tanking, going long ensure the stock price must increase, correct?

Thanks again

Kavy

[Slava]

Originally Posted by Kavy

Thank you for all the comments.

I would like to bet on a stock tanking, going long ensure the stock price must increase, correct?

Thanks again

Kavy

Ya, so you either want to short the stock then or buy a put as was mentioned before.

[SeoulFire]

If you expect it to tank then do as Slava mentioned.

One more important piece of advice - don't be an insider.

[Kavvy]

Originally Posted by SeoulFire

If you expect it to tank then do as Slava mentioned.

One more important piece of advice - don't be an insider.

I have no information, just lots of reading about the current states of affairs.

[Kavvy]

Thanks for all the comment, tips and suggestions all!