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To those of you who had owned or still buys short equities preparing for perceived upcoming crashes/bear market, have you made money from that? If suffered losses, was it big loss? Was it worth it? Thank you for satisfying my curiosity.
To those of you who had owned or still buys short equities preparing for perceived upcoming crashes/bear market, have you made money from that? If suffered losses, was it big loss? Was it worth it? Thank you for satisfying my curiosity.
I have profited from shorting, however it's extremely risky and I have personally seen fortunes go up in smoke quickly.
There are circumstances where shorting can be profitable and some have used as a hedge aka short against the box or the other side of a long option (both can be very risky). That being said, it's easier and less risky to buy a put vs. shorting.
I've also lost money shorting, and that loss while not big in proportion for me, was a significant amount of money. And that being said...this didn't even include the interest to short a hard to borrow security.
I used to short high flying tech stocks in the late 90s when stocks like Dell and Applied Materials would go up and down by $20 or $30 or more in a single day. I had to keep calling into my brokers computers to check on the price, since I was not connected to the internet and "Signal," which was a real time stock pricing service was not available where I lived.
If you do short a stock especially a volatile one, keep a careful eye on the price. And make use of "Buy-Stop" orders in case you are away and can't watch the ticker.
I'm 6/6 in shorting, but it's a little nerve-wracking. 3 of my shorts were held for less than 10 days and I usually short in lot sizes 4 times of my normal long lot size. I either setup a stop-limit cover order that is 10% lower and 5% higher. Sometimes I'll do a pair-trade and short a stock that is at a comparative disadvantage (bad technicals, bad management, scandal in the news, etc) while going long one of their strong competitors. As long as my short moves downward more than my long position I'm happy. The last year I've shorted Tesla, Wynn, Cheesecake Factory, & Carmax. I'm currently long Tesla and Carmax, and I'm not short anything right now.
I used to short high flying tech stocks in the late 90s when stocks like Dell and Applied Materials would go up and down by $20 or $30 or more in a single day. I had to keep calling into my brokers computers to check on the price, since I was not connected to the internet and "Signal," which was a real time stock pricing service was not available where I lived.
If you do short a stock especially a volatile one, keep a careful eye on the price. And make use of "Buy-Stop" orders in case you are away and can't watch the ticker.
Glad to hear that you had a risk protection measure in place, and the OP should for sure take heed and to heart that. One thing though, with a really volatile stock, be CAREFUL with a Buy Stop, possibly consider a Buy Stop Limit. A Buy Stop, is a buy order at a set price. Once the stock hits that specified price, it executes a market order to buy. If it's a quick moving market, the next executable price COULD be much higher than the stop price. Some food for thought.
I'm 6/6 in shorting, but it's a little nerve-wracking. 3 of my shorts were held for less than 10 days and I usually short in lot sizes 4 times of my normal long lot size. I either setup a stop-limit cover order that is 10% lower and 5% higher. Sometimes I'll do a pair-trade and short a stock that is at a comparative disadvantage (bad technicals, bad management, scandal in the news, etc) while going long one of their strong competitors. As long as my short moves downward more than my long position I'm happy. The last year I've shorted Tesla, Wynn, Cheesecake Factory, & Carmax. I'm currently long Tesla and Carmax, and I'm not short anything right now.
What’s your rationale at shorting 4x what you would take as a long position? Also why would you set a 10% loss vs 5% gain stop outs? Seems like two odds pairings
Last edited by Lowexpectations; 02-27-2018 at 09:50 PM..
I tried it once a few years ago and made a small amount. Only held the position for a few days. Haven't tried it since. There is something strange about not knowing how much you could lose. Setting a stop loss is not a guarantee.
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