Forum Archive Index - February 2003

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

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On Sun, 02 Feb 2003 15:31, Holden Glova wrote:
> 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.

For anyone else interested in learning more about options, I just found this 
website http://www.optionetics.com/ . The trading education area seems quite 
good (I say seems because I don't know enough to be sure yet).

- -- 
Signed,
Holden Glova
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