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InvisibleAhab McBathsalts
OTD Windmill Administrator
Other User Gallery Ultimate Champion: Blackjack


Folding@home Statistics
Registered: 11/25/02
Posts: 35,107
Loc: Wind Turbine, AB Flag
I did my first short. * 1
    #26859250 - 08/02/20 04:41 PM (3 years, 5 months ago)

REG. Fuck it. Let her buck.


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"Nobody exists on purpose. Nobody belongs anywhere. Everybody's going to die."


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OfflineBrian Jones
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Registered: 12/18/12
Posts: 12,340
Loc: attending Snake Church
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Re: I did my first short. [Re: Ahab McBathsalts]
    #26860090 - 08/03/20 06:21 AM (3 years, 5 months ago)

The idea that I could predict failure is very attractive, but the risk is just too overwhelming. I wonder how much Michael Burry had to pay out on shorting the mortgage market before he turned out to be right and made 100 million.


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"The Rolling Stones will break up over Brian Jones' dead body"    John Lennon

I don't want no commies in my car. No Christians either.

The worst thing about corruption is that it works so well,


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InvisibleGuy1980
Registered: 09/11/12
Posts: 723
Re: I did my first short. [Re: Brian Jones]
    #26862518 - 08/04/20 11:49 AM (3 years, 5 months ago)

Quote:

Brian Jones said:
The idea that I could predict failure is very attractive, but the risk is just too overwhelming. I wonder how much Michael Burry had to pay out on shorting the mortgage market before he turned out to be right and made 100 million.




Why is the risk higher shorting over going long?


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OfflinegeokillsA
∙∙∙∙☼ º¿° ☼∙∙∙∙
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Registered: 05/08/01
Posts: 23,417
Loc: city of angels Flag
Last seen: 1 hour, 20 minutes
Re: I did my first short. [Re: Guy1980] * 1
    #26863136 - 08/04/20 05:51 PM (3 years, 5 months ago)

Stocks die at $0.  Upside is infinite.  You go long, you can only lose what you put in.  You go short, your losses are potentially infinite.  In practice, your broker will liquidate your position as soon as they lose confidence in your ability to pay back your losses -- which is typically the amount of money already in your account, however an unexpected buyout offer or breakthrough can quickly eclipse the funds your broker has immediately available in your account to recoup the loss, which can leave you in debt.  Less dramatic but equally important to consider, the market has an upside bias by default.  The majority of large funds are long-only oriented.  With central banks easing monetary policy across the globe, the intent to maintain that upside bias remains very clear.


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InvisibleGuy1980
Registered: 09/11/12
Posts: 723
Re: I did my first short. [Re: geokills]
    #26863761 - 08/05/20 03:20 AM (3 years, 5 months ago)

Thanks, that's a decent answer.

I would say then, if shorting, why not go with a CFD, and set a Stop Loss with a bit of room for slippage?  Fund your account with less than you plan to invest and use leverage to scale it to your planned investment.  I doubt you'd get further than your initial investment into debt, they'd margin call you quite quickly once your funds don't cover your losses.


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