Let me explain briefly why you should stay away from shorts. These are not set it and forget it plays. This would have been something I would of had to watch until I closed the position and something like this could have turned real bad on me fast as fuck. Right now I would look like a genius but.... Here is the true danger.
I have a margin account, in other words I have a open line of credit with my broker, If I need that money I have to pay interest on it. Now my creidt line is way less than my Tesla position.
Now the most I could have made on 1000 share short would be 25k, and bbby would have to hit zero for that to happen. But this is the huge but. My losses are unlimited. If bby hit $200 for some reason, I'm in the hole for $175k, Now I can take my loss and have a loan with the broker. Or if my loan couldn't cover it. I would get a margin call, in my case it's a literal phone call. They give me X amount of time to deposit that money in to my account, or they have the RIGHT to sell $175k worth of my portfolio if I don't. This is not a newbie play. I don't know if they still do it, but RH was giving kids so much leverage they got destroyed doing things like this. I had to prove assets beyond my portfolio If I wanted more than they offered me.
Both of these numbers are extreme to show the point.
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Let me explain briefly why you should stay away from shorts. These are not set it and forget it plays. This would have been something I would of had to watch until I closed the position and something like this could have turned real bad on me fast as fuck. Right now I would look like a genius but.... Here is the true danger.
I have a margin account, in other words I have a open line of credit with my broker, If I need that money I have to pay interest on it. Now my creidt line is way less than my Tesla position.
Now the most I could have made on 1000 share short would be 25k, and bbby would have to hit zero for that to happen. But this is the huge but. My losses are unlimited. If bby hit $200 for some reason, I'm in the hole for $175k, Now I can take my loss and have a loan with the broker. Or if my loan couldn't cover it. I would get a margin call, in my case it's a literal phone call. They give me X amount of time to deposit that money in to my account, or they have the RIGHT to sell $175k worth of my portfolio if I don't. This is not a newbie play. I don't know if they still do it, but RH was giving kids so much leverage they got destroyed doing things like this. I had to prove assets beyond my portfolio If I wanted more than they offered me.
Both of these numbers are extreme to show the point.
Jump in the discussion.
No email address required.
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