Yes Niceboat, I am not shorting anything today. I need to let you know that I have never owned any stocks. I have been studying them for a long time though,especially this last two years. I am disabled, and it will take me about two more years just to get out of debt. My current plan is to start investing about $50 a month when I get out of debt. To be honest I don't think I would have the guts to short a stock, or to use margin.
PSs: after a very quick look at TXU, I think the stock will still be a long term short position. Just yesterday TXU dropped their dividend by 80%. Before TXU's price started dropping the dividend yield was a round 4%,This was due to TXU being looked at as a growth/utility stock. Now it will be looked at as a utility stock that is in trouble. I think over the next six months the stock will drop to less than $5, unless they raise the dividend in that time, the reason being that people will demand a much higher yield than before. So if you short the stock and buy a new call at the current price, you should be able to control your risk of a loss. If my guess is correct you should be able to have a gain of around 30% over that six months.
Come see me at Systematic Investing group #board-966 lets talk formula plans.
