shorting and put strategy

[Melf Elf]

I think DHI can have a good breakdown.

nullzero,

No doubt, it could. 

Just wanted to give you some tips on where to short since you're new at it. 

Good luck with the trade! 

[nullzero]

Thanks melf for strategies and info you have been a great help to me. I can loose my money fast if I dont know what im doing shorting. I hope to learn more from you melf any other tips info on shorting your strategies etc send them over to me  im looking to mnake some money with you melf and the others! 3stocks is such a wonderful area to talk to other people and share info, ideas, strategies to increase our profits.

[Terliso]

Shorts Lists: take ur pick

UNH, EBAY, CHS, POWI, BKHM, ADI, SCT, MCO, PANC, CYH, HHGP, LOJN...

Added some potential shorts

PG, JNPR, TEVA, ERTS, MXIM, LEH(my target $61.00), COH, AMZN, NUAN, SWKS, ADBE, JLG

Have fun!!

So far, the shorts that doing great are:

JNPR, ERTS, LEH, NUAN , SWKS, JLG, EBAY,CHS, POWI, BKHM, HHGP , JOJN

[catrader]

another thread for decent reading about shorting, http://www.hotstockmarket.com/forums/showthread.php?t=36280 .

[Terliso]

This is quoted from that message board:

fundamentally weak
I would not short the stock, since you loss is unlimited. Puts would be more logical because you know you're risk entering the trade.
__________________
We learn more from one failure than from a hundred successes.





I agree that ur loss would be unlimited in shorting stocks but that would be stupid If u don't want to cut ur loss early in the game.

Puts & Calls are more riskier because you could lose ur whole investment if the trade did not go ur way by the time the contract expired.

[Richard]

This is quoted from that message board:

fundamentally weak
I would not short the stock, since you loss is unlimited. Puts would be more logical because you know you're risk entering the trade.
__________________
We learn more from one failure than from a hundred successes.





I agree that ur loss would be unlimited in shorting stocks but that would be stupid If u don't want to cut ur loss early in the game.

Puts & Calls are more riskier because you could lose ur whole investment if the trade did not go ur way by the time the contract expired.

I have to disagree.

First off, holding your puts until they are completely worthless is just as stupid as holding your shorts too long. If you have in-the-money puts, you can bail before they are worthless.

Second, puts are leveraged. If you short 100 XYZ at $50 with a stop at $55, you've risked at least $500. If it gaps above and runs, you are going to lose more. Depending upon strike and TV, you can most likely place the same bet of $500, which will return nearly equal to the short position, and it's gaurenteed that you can't lose more than $500.

Third, your maximum return in a short position is 100%. You can make much more than that with puts. The risk/reward factor favors puts without a doubt.

Finally, when your'e short, you owe somebody something. That fact may never come into play, but I gaurentee you, when it does? It's going to sting.

This is just my opinion, and I'm certainly not trying to talk anyone out of shorting stocks. For me, puts just make more sense. Like most others, I was taught to believe that options are too risky, too complicated. I believed it until I started trading them.

If I have $0.02 to add to this thread, it's NEVER EVER EVER  EVER short a stock based on fundementals alone!

...and for what it's worth my JUN 39 puts on QQQQ are up over 300% and .32 away from being in the money/


Cheers,
Richard

EDIT: to add my chart, for those intrested.

[catrader]

if close positions listed for analysis here would have been the results,
dell now 24.25 when posted 25.54 so guess make like 5.5%, on the short, on the may jun 25 put lose all premium right now since  buy at 0.55 and if sell now 0.5, jun 25 put .9/0.7= 28% gain and for aug 25 put 1.4/1.1 = 27.3% gain.

powi now 18.03 when posted 19.87 so maybe like 9.3% profit in the short, in comparison to jun 20 put 2.35/1.1= 113.6 % profit.

So what can be deduced so far is that if right in picking directions, puts might give you a better result because of leverage.  But then the market has been red as of late so not sure if a good sample for analysis.  will keep learning.  Seems the last month forgot to check on positions and big mistake, my positions are shrinking.  When investing, have to be in it like 24/7.  You snooze, you lose.

Any candidates you have for right now to analyze during the weekend?  Hopefully I'll have some time to go over market in the weekend and see. Another of my mistakes, not looking at indexes like qqqq for put or calls. what are other tickers for other indexes?   Richard, you sharp and congrats on your profit!

Lastly, will go on a Profit Strategies 2 day option workshop on may 30-31 in Irvine, CA.  Anyone on this board from the SG Valley in S. cal interested?  I have an extra pass that my friend might or might not use so see if anyone interested in going and carpooling if my friend cannot make it.  Guess pm me if interested or for more details.

[Richard]

Another of my mistakes, not looking at indexes like qqqq for put or calls. what are other tickers for other indexes?   Richard, you sharp and congrats on your profit!

Thanks, cal. IMO, the Q's are perfect for options trading. They represent the amalgamation of market sentiment, and they are highly liquid. Makes for good contracts!!

You may also want to add the VIX to your daily studies. It's a contrarian index, so when the market is down, you'd want calls on the VIX, and visa versa.

The chart I posted above shows a great bearish setup, and once it's confirmed? Well, it's on like Tron. When the market shows you big profits, you have to go for it, and the more confidant you are, the more leveraged you should be.

Cheers,
"Killer Instinct" Richard

[catrader]

www.stockta.com, let's see if they are good aid.  Stocks filtered through here in overall bearish and higher priced, include, mhk, rsp, znt, will post these at prices attainable tomorrow and observe.  anybody with input on stockta.com, use it?  any use?  no help at all?  What other stocks screeners do you use.  I would say Medved Quotetracker is good and free but guess need to use it more to see for real.

[Terliso]

Re-post from premium board:

While on the other thread has some serious discussion about their losses in this pure market massacre.....  ---->Lets look in the market for possible short play

So my question is, did anyone else slash and burn positions before the worst of the lows, and if so what made you see it coming? Or what things do others look for to spot peaks?

1) Price Divergence --- this indicates that the bullls are getting weaker

The action in NASDAQ for today is just a minor bounce, we haven't seen the low yet

NASDAQ broke the 50(SMA), 200(EMA) & 200(SMA) .... As said before NASDAQ is very weak

It may bounce again next week but the downtrend will continue I believe

Nasdaq closes @ low of day, very ugly... So put a tight stop on ur Longs for tomorrow & the rest of this week

Bears are very strong let's play in the strong side:

Shorts List:
INTC, AMAT, SMH, TXN, BRCM, QCOM

RFMD, PALM, KLAC, VRSN

[Terliso]

Shorts Lists: take ur pick

UNH, EBAY, CHS, POWI, BKHM, ADI, SCT, MCO, PANC, CYH, HHGP, LOJN...

Added some potential shorts

PG, JNPR, TEVA, ERTS, MXIM, LEH(my target $61.00), COH, AMZN, NUAN, SWKS, ADBE, JLG

Have fun!!

Shorts pick posted on May 07. 2006 if you just sold all these in the opening bell of MAY 08, 2006 you could be a rich man by now... not that rich
 
          Buy Price          Current price         Gain/Loss
UNH    $46.15               $42.09              8.80%
EBAY  $32.55               $30.20              7.22%
CHS    $29.51               $30.04              1.80%
POWI  $19.59               $17.50              10.67%
BKHM  $5.09                 $4.13                18.86%
ADI     $35.63               $33.39              6.29%
SCT    $21.00               $19.40              7.62%
MCO    $58.25              $53.66              7.88%
PANC   $6.06                $5.77                4.78%
CYH     $35.00              $36.78              5.08%
HHGP   $14.47              $11.00              23.98%
LOJN    $20.96              $17.06              18.61%



Shorts pick posted on May 13, 2006 (if you just short it @ the opening bell of 05-15-06 you could have made some fortune:)

        Buy Price            Current price        Gain/Loss
PG      $54.69               $54.82              0.24%
JNPR   $16.80               $14.55              13.39%
TEVA  $38.04               $35.56              6.52%
ERTS   $44.94               $44.00              2.09%
MXIM   $32.26               $31.75              1.58%
LEH     $69.45               $64.33              7.37%
COH    $30.36               $28.43              6.36%
AMZN  $32.55               $35.19              8.11%
NUAN  $10.62               $9.48                10.73%
SWKS  $6.35                $5.52                13.07%
ADBE   $31.86              $29.27              8.13%
JLG      $24.17              $21.53              10.92%

[Leaira]

What about XMSR?

Leaira

[Terliso]

What about XMSR?

Leaira

XMSR that would be 28.38%

[catrader]

so per terlisso's input can short even $10 stocks.  I thought needed to be like $50 or above to be overpriced.  Again need to analyze the market more in depth. Wish could do this fulltime someday.  When working it makes it more difficult.

[Terliso]

so per terlisso's input can short even $10 stocks.  I thought needed to be like $50 or above to be overpriced.  Again need to analyze the market more in depth. Wish could do this fulltime someday.  When working it makes it more difficult.

Yes, You can short $5 above

Is anybody here can short $5 below with their broker? if so, what is your broker?