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Short Selling Strategies: How To Avoid The Short Squeeze With Put Options
“Investors are worrying that a three-month surge in stocks might be overdone.” - So read a piece of market commentary from the Associated Press a few days, as the Dow, S&P 500 and Nasdaq all slumped.
Thanks for the heads-up, guys. You’re about two months too late. Not only did we call the bear market rally before it began, we’ve also spent the past couple of months warning you not to get swept away by the sudden surge of optimism and over-confidence as stocks have pushed higher.
Bear market rallies are fun while they last. But they’re only temporary. And the last week of…
23Jun2009 | Investment U | 0 comments | ContinuedTurning Wall Street’s “Darkest Art†Into Your Gain
It’s one of the oldest tricks in the bag and it has a terrible reputation. But the sooner you learn how to use it, the sooner you’ll be able to sleep soundly at night.
Bloomberg recently called it “One of [Wall Street’s] darkest arts.”
Timesays, “It’s a trick that has been hastening market crashes for at least 400 years.”
New York State’s Attorney General Andrew Cuomo likens this strategy to “looting after a hurricane.”
Worst of all, it’s always the first “fall guy” for politicians and media (check out the recent “expose” from the Daily Show as the perfect example) when times get tough.…
21Mar2009 | Q1 Publishing | 0 comments | ContinuedThe Five Financial Crisis Aftershocks Investors Can Play for Profit
It used to be that buying a stock was like buying a house. You’d find a house that looked super from the street – and inspect it carefully, before committing to a deal.
But what if you couldn’t get inside? Or even worse, what if the property changed after you carefully inspected it, so that you ended up buying a house with a trashed interior, or a crumbling foundation that made the house risky to live in, and virtually worthless to sell? Or what if a new regulation made the house you spent so much for – and had saved so…
18Nov2008 | Money Morning | Comments Off | ContinuedShort Sellers and Speculators Are Heroes, Not Villains
I’m expecting a lot of nasty e-mails on this column, but the truth needs to be told. Short-term traders, especially short sellers, are often blamed erroneously for manipulating stock prices, forcing them down far below their real value, and for creating crashes and general chaos on Wall Street.
In fact, short sellers have been identified as so vile by SEC Chairman Christopher Cox that he has banned short selling for some 980 publicly traded companies. Chairman Cox and other critics of the market blame short sellers for several grievances:
1. Short sellers destabilize prices in a shaky market, and in a panic…
3Oct2008 | Investment U | Comments Off | ContinuedThe Next Victim in the Banking Fiasco
A New Short Idea in the Banking Sector
“You know, you saw subprime go first, and then, on a slight lag, you saw home equity, and now in the lag, you’re seeing prime go. And it’s exactly the same loss factors. But remember, the components of where we are in the states…[are] very different. And we started doing more jumbos in ‘07, so a lot of that is — part of that is ‘07 vintage, which I think I told you at the time we were going to do and grow our balance sheet and gain share. And we were wrong.…
28Aug2008 | The Penny Sleuth | Comments Off | Continued
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