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  • BigT1717 BigT1717 Jan 14, 2004 11:53 AM Flag

    Short covering keeping this up

    today is the last day to satisfy margin calls that resulted from that big spike 3 days ago.. so all the shorts who used too much margin, we're holding and hoping it would drop... it hasn't and they are being pressured to cover today......

    Barring a terrific report from JNPR and INTC after the close, I simply don't see buyers coming to the forefront to keep this stock propped up here.... especially with the impending pricing of the offering.

    I would use the short covering advantage to get out long positions today, unless you truly believe that INTC and JNPR will blow the street away with their numbers.... I think the mkt is already pricing in a 1-2 cent upside surprise.

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    • STOP LOSS is just a term to define a STOP that protects you from a loss.

      it can be a limit or mkt stop.

      then again terminology may differ a bit from broker to broker.. I know that I'm right according to the two brokers that I use.

    • My point was that the saying implies shorting is more risky. I have seen more stocks drop 50% overnight than climb 100%.

      However, I ran a test with Tradestation, were I shorted an index the same time everyday and went long the same time everyday. The results
      was about the same. Basically trading is roughly a 30/70 game.

      I have tested stops as well and they killed many systems.

      IMO the only solutions is to have shorts and longs, and manage the postions. That is right: averaging in. I have only been able to find winning systems that way.

      The only other method is to buy/short and hold. I had amazing success with that: 1000% in one year, and lost all the next year.

    • In this stock you need a STOP not a STOP LOSS as it could jump over you with a stop loss. That goes for buyers as well as sellers.

    • yes but what is in your account is not necessarily what is in the stock!

      let's say you have a portfolio of 3 stocks..

      if one goes bankrupt you only lose that investment..

      however you're 1 short can potentially clean you out of all your positions and if the mkt moves fast enough, you may owe money to your broker before they can sell everything. Also depends on your broker and your rating with them.

      I'm not saying not to short... I do... I was just answering the question.. the trick with shorts (as with all trades) is to protect yourself with stop-losses.

    • exactly.
      I know first hand how a stock can go $100 to zero. So imo shorting is no riskier than buying.

    • With a stock a very high beta like Rimm I do not think that the brokerage houses would give three days to cover. I more that likely would be one day and if it is running up like it did on the 50% day they may not even give an hour.

      • 1 Reply to waterfallsparkles
      • judge_jury_and_executiioner judge_jury_and_executiioner Jan 14, 2004 12:09 PM Flag

        It depends ENTIRELY on WHO the account belongs to.

        For a hundred lot'er....the brokerages aren't going to give you much room. And you are right, if/when they get nervous...they will clean up those credit risks first.

        Hedge Funds are a different matter. They are playing by a different set of rules by definition. And let's be honest...are worth one hell of a lot more than Hundred Lot Accounts.

        So think about it, make some calls, and you may finally start putting some of this together. Although I seriously doubt it.

        Guess I forgot to put that on some earlier posts.

    • exactly

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