Does anyone sell short?

[Rolo]

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D'oh!

I wanted to sell RHAT short this week since I sold my long position last week, but lacked the chutzpah. Now I lack the 20% gain I could have had.

I am a little hazy on the process, hence my reluctance. The big question I have is how long can you have a short position? I have not found anything definite on it, which makes me think that there is really no definite answer.

 

[tsptalk]

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Rolo wrote:

The big question I have is how long can you have a short position? I have not found anything definite on it, which makes me think that there is really no definite answer.

I have done a lot of short selling over the years and to my knowlegde, there is no time limit.

I thought I was genius short selling some of the high flying techs in like 1997-1998 when stocks like Amazon were sellingfor $12 to $25 (split adjusted). Of course by late 1999, early 2000 they were up to over $100. Eventually I wasright as it came down to about $6 dollars several years later but I had to cover (because of fear)those shorts well before that and take my losses. :shock: Right concept, bad timing.

 

[Frizz B.]

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I love the idea of short selling. Instead of moving the money into the G fund like I have been doing when I feel the market is too high. You only gain the 1 penny. Now with short selling you can play those highs to lows just like I am playing the lows to highs. As long as you stay market you can sell at any time and if the shares have gone lower you take the profit. I am now going to start the process of finding equities like the Nasdaq 100 (qqq) that work with the trading company (Scottrade) and start a differential for each equity. I do need to find a list of equities with their trade symbols to get started. I will be calling Scottrade and hopefully I will get a list from them. Then when I have all the information of each differential, I can pick the fund that I feel will lose or gain the most at the time of my trade. The more I get the better I think I can do. So if anyone has any equities that they know of, please send them along. I did get the ones for Wilshire 5000 and the S & P 500, but I need more. MORE MORE MORE MORE

THANKS, FRIZZ B.

 

[Rolo]

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Wilshire 5000 = Wilshire 4500 + S&P500

 

[azanon]

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Stocks on average go up, so no. Seems it be akin to gambling (since in both cases the house wins more than it loses).

 

[Guest]

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How does one sell short on Scottrade?

 

[Rolo]

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mlk, You specify "Sell Short" when you place your order. When you want to close the short position, you "Buy to Cover" rather than a regular "Buy" order.


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I disagree, Az. Stocks, on average, for all of 2004 have been falling. A lot. True, stocks, on average, over any ten-year period or more do rise in value, but that is pretty irrelevant to the short- and medium-term trader.

This morning, I did a screen for ETFs that had > 0% increase in the past three months. No results found. Cash it is.

I am reluctant to sell short at this moment since I do not know if I am bullish or bearish. More importantly, I do not know if the Market is bullish or bearish. I am legitamately undecided, neither bullish nor bearish. Watching my Scottrade account being eviscerated this week (what I get for having most of it in one sector) with no otherplace to invest has left me with my tail betwixt my legs. I like cash right now, totally neutral. I sold most of my stocks. I did not sell short. The Market is having major, unpredictible swings, like a thresher in Maximum Overdrive. I should have listened to myself and waited for confirmation. I gambled and lost. F****** ouch. (It is not so much the money as it is kicking myself.)

Just like refusal to buy a stock at the notion that it may very well fall quickly, I do not want to sell short due to the notion that the Market may decide to rally after all. If a market (or stock) bottom is perceived, value investors and institutions may drive the price back up and create a short squeeze. Indeed, a damned if you do, damned if you do-the-other-thing situation. "Don't" is the only reasonable course.

 

[azanon]

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I disagree, Az. Stocks, on average, for all of 2004 have been falling. A lot. True, stocks, on average, over any ten-year period or more do rise in value, but that is pretty irrelevant to the short- and medium-term trader.

It would be if short and medium term traders knew when the market was going to go upand down. I dont believe anyone knows that, and this site only reinforces my belief. So if you dont know, its illogical to bet against the market.

If any of you are actually beating the market this year, webster made a term for it a long time ago; its a 4 letter word spelled "luck".

I suscribe to the MPT, and anyone that does would never short.

 

[Rolo]

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azanon wrote:

I suscribe to the MPT, and anyone that does would never short.

Chicken! heh

Apples and oranges. Generally, you do not short the market, but you short a stock. There can be plenty of reasons to think that a stock will go down and none to support its going up.

To say that "everything always goes up....eventually" is not really saying anything at all. I am a firm believer in the "Sun Will Rise Tomorrow" theory, butsubscribers of said theory have nothing insightful to say.

I have no convictions either way, so, in that case, yes, I would attempt neither a short or long position atm.

 

[azanon]

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MPT applies at the company level as well. Everything is factored in, unless you have insider information.

 

[Timer]

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azanon wrote:

MPT applies at the company level as well. Everything is factored in, unless you have insider information.

Az, when you say MPT, you mean Modern Portfolio Theory? If so, how do you apply it to TSP funds?

 

[Bullitt]

Bill Fleckenstein to close his short selling hedge fund, Fleckenstein Capital, and switch to a more balanced, non-hedge fund approach to investing.

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The fund manager writes that he always intended to return to the long side of investing, as opposed to the short-seller’s strategy of betting against stocks. He became a short seller in part because of what he described as a bubble that stemmed from Alan Greenspan-era policies. At the same time, being a short seller, he writes, is “very stressful, nerve-wracking and generally not very much fun."

http://dealbook.blogs.nytimes.com/2008/12/08/fleckenstein-to-shutter-short-selling-hedge-fund/

 

[Frixxxx]

I sell short all the time. (Currency)

Indicators show market up. Other indicators show market down.

If you KNOW there is a good chance the investment is heading down, WHY NOT short? And please look at this as short term, not long term. I usually close short positions based on profit and open a new one if the ride is still down. Time is always your enemy, ask anyone wanting to retire in the next few years, They're probably freaking out and may extend their labor years to make up for the losses in their investments.

Really though, shorting is an investor choice. If your sanity allows for risk, any investment that makes money is your friend.

I am not a professional and these are not to be used as an investment strategy on a whole. YOU DETERMINE YOUR PATH!

 

[tsptalk]

Bill Fleckenstein to close his short selling hedge fund, Fleckenstein Capital, and switch to a more balanced, non-hedge fund approach to investing.

I heard Bill on Fast Money a couple of weeks ago say that it has become too dangerous to sell short now, with the massive liquidity being pumped into the system.