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Xinyuan Real Estate Co., Ltd. Message Board

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  • shelly_showman shelly_showman Oct 26, 2012 2:09 PM Flag

    Mechanics of a Trading Mistake

    Although I said I thought you shorted too soon, I also said if you were willing to hold more than a couple
    days, you wouldn't lose. Still don't think you would have, you had time .

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    • I never short any stocks before, but I did a little research before regarding short timing. The problem is timing is more difficult for short than long. For long, you can theoretically hold forever, but for short, you have to cover your loss at some point either by yourself or by a margin call.

      Also, it is easier to find a short candidate than find accurate timing for a short. Even many successful traders or fund managers are hurt by awful timing of their shorts. However, some short celebrities can get timing right because their short positions themselves can influence the market. Latest examples are David Einhorn, Carson Block, etc.

      • 1 Reply to growth.value
      • GV, don't fear the reaper on short trading. The money's just as green on the other side of the fence.

        Even with my recent position's losses, my adjusted per share cash balance for XIN is still $4.06 per share, a 30% premium over today's closing price.

        More importantly, that $4.06 represents a 79% increase in my 2012 XIN profits, since the average purchase price of the shares I sold in April was a fraction over $2.11.

        Here's the math behind that: If I'd never traded XIN, my 2012 XIN profits would stand today at $1.04 per share ($3.15 minus $2.11); having traded XIN, my profits today instead stand at $1.95 per share ($4.06 minus $2.11).

        Easy choice, yeah?

5.55-0.12(-2.12%)Oct 21 4:02 PMEDT