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FAQs Frequently Asked Questions

Short-Sale Set Ups
For your style on short sale stops - if 50 day is 92.15 do you cover at 92.16 or give it 1% above the 50 DMA?

Depends on what I want to do. And that depends on a number of real-time factors as in the volume on any bounce/rally in a stock, where the indexes are, etc. Also, where you set stops and how you handle your risk is entirely dependent on individual risk tolerance and preference as well as objectives for the trade that should be determined before going into a position on the short side.

Yesterday [June 16, 2011] I employed an index stop based on the fact that the market was down 12 days, so when the NASDAQ undercut the 2603 level, I used that as short-term stop/profit objective with the idea of shorting again at higher prices on the reflex rally. I use this method because I run huge positions and can easily be 200-400% short on an intra-day basis and have to keep a tight leash on my risk.

First published: 17 Jun 2011
Last updated: 17 Jun 2011