http://seekingalpha.com/article/202222-the-biggest-problem-facing-sirius-xm?source=feed
found a great article! I am still not completely ready to recommend this stock, but as i was researching on my lunch, i found this interesting article. it also covers short selling and shows a real example. Short selling is something that i have brought up a few times. We have stayed away due to the complexity of it, which is the best move for now.
5 comments:
Decent explaination on how short selling works - but I still don't fully understand thd details. It seems to me like we'd be betting for a stock for fail, which doesn't seem right.
Ry, are you proposing we invest in Sirius in hopes that it rises?
My opinion on satalite radio is that it will soon be obselete and replaced by streaming radio through internet feeds. Data is being able to be sent faster and faster over the airwaves and sooner or later people are just going to hook up their iphones their car and stream whatever radio station they want.
Although 1.00 share is pretty low risk...
I was only thinking of a quick buy and sell, mainly due to it's low price. If we can buy enough shares and the stock moves a few nickles, hopefully quarters, we stand to have a faster buy & sell than a $10 stock. Quick hit and run. Pocket cash along the way, hopefully.
If you want to sleep better at night, we can put a limit loss, in case it goes down, we can get out at what point we see best.
Siri was at 1.22 only yesterday. it has been moving about 7 cents either way over the past week.
Im still not sure myself if we should buy. I agree with your long term forecast on satellite radio, but I'm not ready to fade them out for good just yet.
here's the basic ABC on short selling..
A-You borrow shares from the brokerage, in our case Zecco - and SELL them via the brokerage to a buyer (electronically handled)
B-You have to return those shares back to Zecco at some point, paying interest on the amount "loaned" in the meantime
C-If the stock rises, we owe $, if the stock falls, we keep the profit.
I'm sure you've all heard the term "covering your shorts" meaning that short-sellers are paying back the shares they borrowed from the brokerage. Shorters do that when the stock falls to a price they are happy with selling at, or when the stock is rising and they are afraid of losing big $$$ - which results in a short squeeze, or the stock price being increased even further.
to clarify A- literally after you short the stock, say 500 shares of SIRI at $1 - Zecco would credit our account with $500.00 from our "short sale". So if SIRI falls to $.50, we would buy back 500 shares of SIRI for $250, pay back Zecco the 500 shares, and keep $250 pure profit. If on the other hand SIRI rises to $10, we still owe Zecco 500 shares of SIRI - or $5000, resulting in a loss of $4500.
The big thing with shorting is this -- unlimited downside potential, limited profit potential, meaning that a stock can rise to infinity, but can only fall to zero. Follow me?
Whata up boys. I have had a few free moments to read everyones thoughts this morning. I agree with 2 motions.
JC motioned to buy 15 shares of Pfizer and I would like to second that. My aunt works for Pfizer and everything she has told me it is an extremely well run compnay and a leader in its industry. We do not have any phamecutical companies and Pfizer would be a great choice.
I also second Joes motion of purchasing 20 shares of Newscorp. We live in the age of electronic media and Newscorp is one of the leaders in the industry. I only see them grwoing by leaps and bounds in the future.
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