AMD just announced a nasty 10% reduction of their workforce due to "deteriorating business conditions." Bad scene. Good time to try my hand at shorting for the first time ever.
Shorting, for those who didn't catch my lesson earlier, is pretty simple: I sell you stock I don't own. Don't worry, I'll make sure I come up with it. I'm just looking to buy it to cover my sale to you, at a lower price than I sold you it for. I sell you a share of Wal-Mart for $50. If I can buy it after a drop to $40, sweet, I just made $10.
Problem? If Wal-Mart doubles to $100, I still owe you the stock. So now I have to buy to cover the stock at $100, and I'm out $50.
I'm going to try to short at the open of pre-market. Which means I need to pass out soon in order to get any sleep. I'll see how this goes. I could easily lose some serious cash on it. But I want to try my hand at shorting and I think AMD could move.
Worst-case scenario: people see the move as prudent, AMD goes up.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment