*Really* bad week for SCO
clifford_ilkay-biY6FKoJMRdBDgjK7y7TUQ at public.gmane.org
Mon Dec 8 23:44:54 UTC 2003
At 17:33 08/12/2003 -0500, David J Patrick wrote:
>>I think it's a good time to start selling any SCO stock you own...
>That begs the question; are there any investment wizards in the group who
>know how to "short" a stock and, thus" reap the reward for predicting SCOs
>(and soon enough M$s) swan dive ?
Shorting a stock is not difficult or require great financial wizardry. You
just issue a sell order with your broker without owning any stock. Your
broker in turn borrows the stock from someone who already owns it. You make
money if the stock drops enough to cover your transaction costs and then
some but only if you put in a buy order to negate your previous sell order.
You will in all likelihood have to put up substantial margin though.
Keep in mind a few things. First, there are people who trade stocks for a
living and they have access at the very least to the same information you
do. The current price for SCOX reflects their expectations. Second, another
company coming along and taking SCO out might dash your dreams of becoming
rich, rich, rich. Third, you have to analyze the risk/reward ratio. If the
risk free yield is 3% today, you have to do much better than 3%, how much
better is up to you, in order to make it worthwhile. Finally, unless you do
this for a living, the odds are against you that you will make money doing
this. You should avoid speculating with money that you cannot afford to
lose. In other words, if you feel confident that this is a winning
strategy, and you have analyzed the risk/reward ratio and determined that
it is acceptable to you, and you are doing this with money you can afford
to lose, by all means, go for it. Otherwise, you are just another sheep
waiting to be sheared by the pros in the business.
>Should we get a group thing going ?
If you feel that strongly that shorting SCOX or MSFT is a good move, why
wait for anyone else? You don't need a "group" to do this.
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