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by clock_tower 3374 days ago
Best case: you're shorting Sun Microsystems at the beginning of 2000, and it goes from $300/share to $3/share in the next 3 years. (http://www.1stock1.com/1stock1_211.htm)

My advice is to just not touch tech stocks; going short on them is just as dangerous as going long.

1 comments

Even the best case wouldn't have you more than double your money, if you put up 1:1 collateral. I guess you could have less collateral than this, but in that case, given a growth stock, you would be wiped out if there was a modest increase. I don't see the risk/reward curve for long-term shorting.
When the price starts dropping, you would have to sell more shares to maintain a 1:1 ratio. For example, you can double the number of shares each time the price drops by half, and make up to 200%.