Have you looked into single stock futures? They seem to be a much better method for shorting stocks, in part because the margin requirements are lower (allowing you to withstand a short squeeze better) and you don't have to be able to borrow the stock. If short sellers start primarily trading SSFs, short squeezes might go away.
Corey Rosenbloom
· 2 years ago
I've done a bit of research into the single stock futures, but never went anywhere with it. I mainly stick to the index ETFs to play out my short-term biases in the market - I often don't do outright swing trades on stocks anymore. I'm finding it's easier for me to keep up with the indexes and analyze them intensely for trading. I just like pointing out certain patterns or educational lessons in stocks when I see them.
I actually haven't done much - in terms of thinking about short squeezes and reduced margin - with the SS Futures but I will begin to toss that into the mix as well.
Remember how I posted that I'm getting more into futures? Your comment helps solidify that sentiment. Futures are the way to go, it seems!
Thanks!
Aaron
· 2 years ago
Corey,
This is a very interesting post. I completely agree with you when you said that it is easy to dismiss the gain on bad news as something that happens once in a while, but it certainly does happen more than most people think. The homebuilders are the very best example you could possibly use. Nice site, I'll keep checking in.
Corey Rosenbloom
· 2 years ago
Aaron,
Thank you for the comment and for reading. Not only have I seen it happen, I've been on the wrong side of the trade probably dozens of times in my life. It's just so tempting - especially when you're just beginning - to hear something that makes sense on TV and then rush out and take the logical position. It wasn't everytime (because I profited as expected on some), but more times than I thought possible, I would lose small amounts of money thanks to tight stops, or large amounts of money (especially early on) because I couldn't believe (literally) that price was going against me. You learn from times like those.
The housing stocks will probably continue to go lower, and they may do so with force. But they probably won't do it on days when the media sounds the death knell for that sector or the general housing market.
It's just part of the game that keeps us coming back... provided we don't lose too much money on these trades.
All Comments
I actually haven't done much - in terms of thinking about short squeezes and reduced margin - with the SS Futures but I will begin to toss that into the mix as well.
Remember how I posted that I'm getting more into futures? Your comment helps solidify that sentiment. Futures are the way to go, it seems!
Thanks!
This is a very interesting post. I completely agree with you when you said that it is easy to dismiss the gain on bad news as something that happens once in a while, but it certainly does happen more than most people think. The homebuilders are the very best example you could possibly use. Nice site, I'll keep checking in.
Thank you for the comment and for reading. Not only have I seen it happen, I've been on the wrong side of the trade probably dozens of times in my life. It's just so tempting - especially when you're just beginning - to hear something that makes sense on TV and then rush out and take the logical position. It wasn't everytime (because I profited as expected on some), but more times than I thought possible, I would lose small amounts of money thanks to tight stops, or large amounts of money (especially early on) because I couldn't believe (literally) that price was going against me. You learn from times like those.
The housing stocks will probably continue to go lower, and they may do so with force. But they probably won't do it on days when the media sounds the death knell for that sector or the general housing market.
It's just part of the game that keeps us coming back... provided we don't lose too much money on these trades.