Forum Archive Index - February 2003

[Holden Glova <dsafari@paradise.net.nz>]

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1

Hello all,

I am a bit confused on trading options and the shorting stocks. I'll start 
with my confusion over shorting stocks. In todays market why is shorting 
stocks not really mentioned much as a good alternative to going long? From 
what I understand you get several advantages:
* You don't need to put money up front (although of course you should have 
funds to cover those short positions)
* Because you don't need to put your money up front this gives you some 
leverage
* More stocks are going down then going up
So I ask, why is shorting stocks not advocated in popular media? From my 
initial understanding of it there appears to be less risk then trying to go 
long in todays market.

Now onto options. From my little bit of research on this topic over the 
weekend I think this could be a rather involved topic (correct me if I'm 
wrong). Options can be used as insurance for protection against losses, why 
is there so much written material that mentions the value in placing stops 
but not the value in using options? I don't fully understand the idea of 
'naked options' and must require some reading there so I will not question 
this area yet :) Can anyone recommend me some books on the subject of 
options?

Many thanks in advance.
- -- 
Signed,
Holden Glova
-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.2.1 (GNU/Linux)

iD8DBQE+PILs0X8w8X71zPcRAsm1AJ9LNrt5WfKsuYG7a5e0s5yF7TX/DwCfUPvT
pxY7+CnKWtAoYYZvGXZk5+k=
=g0Uj
-----END PGP SIGNATURE-----


----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/