2 ms·
Sure. The first rule is that no trade is a good one without specific entrance & exit points. Saying “I can predict a share will go up/down” independent of that
by kasey_junk 8y ago
Sure. The first rule is that no trade is a good one without specific entrance & exit points. Saying “I can predict a share will go up/down” independent of that specificity & risk profile is a classic example of someone who isn’t realistic in their trading behavior.
The second rule is that shorting is much much harder to get right than going long. Small procedural errors or day long mistimes of the market turn trades unprofitable.
Third, the market for this trade is exceptionally non-desperate people. If you have the money to make this trade happen you have virtually risk free access to trades that keep you fat & happy.
Finally, the riskiest part of this trade is the most hand wavy “hit a ceo” is not a thing I can get a counter party to hedge. It’s quite literally impossible for the vast majority market participants. Even before we talk about the very real likelihood of going to jail let’s talk about the risk of not being successful. See above about short timing.
All told the answer to “why don’t rich guys hit other rich guys to short their assets” can easily boil down to “cause that’s stupid”