just a general investing question NOT related to ZNGA.
lets say a stock is currently about 12.84 (arbitrary price) per share.
would you rather be:
A. long at 9.80 (arbitrary price)
B. short at 13.75 (arbitrary price)
Again this is not a ZNGA stock question, the prices i gave are purely random.
didnt get as many responses as i wanted for my survey, but using my hypothetical example, it was only 2-2 me and lemon would pick a 31% return while nm and hunter would take a 6% return on their investment.
This is also why the lower a stock go's the easyer it is for us shorts to strangle it to death thus comes in the $5 limit to protect.....
I can also short more shares for $10 then for $13.75 because the price is cheaper. then add in the 37% to leverage the tar outa my position that started at 13.75..
so do you get them beans if I shorted at 13.75 and coverd at say 10.00 I could use the profits to increase my position..
as where the long position has to wait fro the price to drop to average down...
ah, now i get it, so option B would be your pick and then you would wait for the stock to get to 10 to cover for a 37% return which would be better than selling today if you were long (option A) for just a 31% return. check
and lemon posted that this random example was just simple math with a 31% vs 6% return. what were they thinking?
short at 13.75 because at 13.75 I could cover and avereage down wich would increase my position at any given time with my profits.
long at 9.80 if I sold at 13.75 and tried to buy back I couldnt increase the number of shares I had unless the stock went back down..
you are essentially asking a math question which has a simple answer.
but you are stupid because you should be long or short based on the individual company and what its doing etc not just based on a math problem. zynga is not yoku or some other stupid pump and dump
thanks for taking the time. you are right, it is a simple math question, for my random sample IF I was an investor that selected option B and had a 6% return, I would feel like an idiot for criticing someone that in the same time was approximately at a 31% return. Once again these are just random numbers for price, but the returns are based on the prices given.