Forgive my dribble, again. But the overall $NBEV message board consensus is short selling. Maybe you specialists could help me with my shorting education? All of you seem to have accumulated rabid fortunes timing and betting $NBEV’s struggling stock price. Your timing seems impeccable and your target buy-to-cover price (~$2.00) seems very reasonable. $NBEV seems to have bounced around in its doldrums, since its inception. But don’t you have to pay margin interest on the borrowed shares over the time you hold the shares? Doesn’t that set the period in which you consider to cover?
So, let say $NBEV current price at $3.00 is impractical. $NBEV is really worth <= $2.00. You think, hey, I can make 50% gain on this trade. You burrow the shares from your broker sell-to-open at $3 and wait to buy-to-close at $2. Harrah, money! But you’re required to pay margin interest on your barrowed shares (anywhere from 2% to 8% depending on your broker), which is a bit tricky. I believe it would work out something like this though.
Sell-to-open 1,666 shares at $3 = Margin loan of $50,000
Buy-to-close 1,666 share at $2 = Gain of $25,000
Margin interest @ 2% over a period of let’s say 100 days = $274 **(online calculator)
Margin interest @ 8% over a period of let’s say 100 days = $1100 **(online calculator)
So, the overall ROI for the trade is $23,900 to $24,726. Let’s just say you guys are living good, so after CG (20%) … you pocket $19,120 to $19,780 With Bien, you might be looking at CG (40%) … you pocket $14,340 to $14,835, yikes!! that hurts. Anyway, the margin interest is minimal compared to (CG), although it’s probably somehow connected to the prime rate? Of course, there are other broker fees and expense that I haven’t accounted for … blah, blah.
All this math and money talk makes my eyes rain. But hey it’s money for nothing, right? I guess, except, for watching this turd circle around the toilet bowl. But that could be a little fun life.
Have any of you naked shorted a stock? Is that a thing? I heard it’s liberating.
BTY, Nelson2, I am the lovechild ghost of H.P. Lovecraft and Hunter S. Thompson.
