
Saturday, March 31, 2007 4:49:14 PM
i know this was discussed before and nobody needs to answer my post but lets say i short 1000 stocks of nwog. to get those 1000 shares i have to pay a security of lets say 2,5$. now with paying 2.5$ i "own" 1000 stocks which I'm selling now. OK i get 0.05$*1000 now: 50$
after the prices drops subpenny i cover my short position 1000*0.009$: 9$
+50$ (from short selling)
-9$ to cover
= 41$
-2,5$ (margin - real expenses)
= 38,5$
Investment vs Output should be:
2.5$ vs 38.5$
I'm getting 1540% of initial investment.
If prices goes up tp 0.07$:
1000*0,07=70$
I have to pay difference between 50$ selling and 70$ covering:
20$+2,5$=22,5$
Investment vs Output should be:
2,5$ vs 22,5$:
I'm lossing 900% of initial investment.
It all depends on the marign i have to pay...
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