01 Apr '12, 8am

Asymmetry in shorting – Is shorting more risky?

Asymmetry in shorting – Is shorting more risky? by Alvin on April 1, 2012 Other than the direction, I used to think that short selling is the same on the long side. I found that is not true and here is why When you short, you can lose more than your capital Imagine you short a stock at $50 and it goes to $0. Your gain is $50 or 100% gain. This is the maximum gain you can get. On the other hand, if the price continues to go up to $100, or $200, or $300… You can lose more than your capital with 200% or 400% or higher – the sky is the limit! And this is without any leverage. It is definitely not a position you want to be in. Yes. Of course you can put a stop loss to it. In fact, you MUST always have a stop loss when you short anything. On the long side, you buy a stock … Tagged as: Trading Read the full article → Related posts:Cut losses – The Truth, The Pain, and The Chance!...

Full article: http://thefinance.sg/2012/04/01/asymmetry-in-shorting-is-...

Tweets

PPC Ads: When ‘Free’ Still Feels Risky

searchenginewatch.com 02 Apr '12, 11am

Sam Cooke once sang that the best things in life are free – like flowers in spring, robins that sing, and CRM software. OK...