Comments on: How To Short A Stock http://livingoffdividends.com/2006/09/14/how-to-short-a-stock/ Join me on my journey to achieve financial independence through dividends, passive income and investments Sat, 15 May 2010 01:48:25 -0800 http://wordpress.org/?v=2.8.1 hourly 1 By: Empty Spaces Inc. http://livingoffdividends.com/2006/09/14/how-to-short-a-stock/comment-page-1/#comment-332 Empty Spaces Inc. Mon, 18 Sep 2006 03:57:00 +0000 http://www.livingoffdividends.com/2006/09/14/how-to-short-a-stock/#comment-332 I just bought Puts.<br/><br/>I meant short in terms of sentiment. I just bought Puts.

I meant short in terms of sentiment.

]]> By: Doug Pedersen http://livingoffdividends.com/2006/09/14/how-to-short-a-stock/comment-page-1/#comment-331 Doug Pedersen Sun, 17 Sep 2006 23:03:00 +0000 http://www.livingoffdividends.com/2006/09/14/how-to-short-a-stock/#comment-331 I think it was Lord Keynes who said "the market can remain irrational longer than you can remain solvent".<br/><br/>This is always the challenge with shorting. A rise in price, however irrational, can still kill you. Shorting stocks where companies are repurchasing (even when the cashflows look brutally bad) is a exceptionally ballsy move.<br/><br/>Question though, in an earlier post you said you purchased puts. While this is a bet that the price will decline, it is not the same thing as going short, since your risk is limited to the option premium. Did you buy puts and also short? I think it was Lord Keynes who said “the market can remain irrational longer than you can remain solvent”.

This is always the challenge with shorting. A rise in price, however irrational, can still kill you. Shorting stocks where companies are repurchasing (even when the cashflows look brutally bad) is a exceptionally ballsy move.

Question though, in an earlier post you said you purchased puts. While this is a bet that the price will decline, it is not the same thing as going short, since your risk is limited to the option premium. Did you buy puts and also short?

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