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Novation Companies, Inc. Message Board

  • optionstrader70 optionstrader70 Aug 29, 2005 1:23 PM Flag

    trading strategy

    Here is my long term trading strategy for next few years. I call it "death of big short" strategy. It is based on the idea that the BS is in trouble based on OSTK lawsuit, all the publicity over naked shorting issue, NFI dividends, great prospects of NFLX and TASR.

    To execute this strategy I will accumulate shares(or calls) of the following companies NFI, OSTK, NFLX, TASR, NAVR. The more BS manages to depress their price the better for me, I am just averagind down from here.

    I assume that sooner or later one of the following events will happen:
    - massive redemptions in hedge funds which take opposite side of my trades
    - criminal investigation in illegal FTD
    - OSTK legal team does it's work
    - NYSE or NASD or DTCC finaly decides to disassocoate itself from the criminals and enforce buyins on outstanding FTD's.
    - SEC, Congress or another goverment entity somehow interfere and stops illegal naked short selling.

    There is a very good chance than any of these events will cause forced buyins and concequently short squeezes in one or more stocks in this portfolio. Moreover, there is a good chance that such short squeezes cause domino effect and force BS close short positions in more than one stock in this portfolio.

    In order to leverage this bet I will concentrate on buying way out of money LEAP calls. Therefore a single stock rally would mean I reach break even on this bet.

    If I wrong I lose some money, if I right and one or more of mentioned above events happens during next 1-5 years. I finaly make my first million and retire. Sounds as a good plan for me.

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