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Of course not, but it's trivial to create a synthetic short position with an almost zero cash balance. Not EXACTLY zero, but close enough. e.g. short a low be
by Nrsolis 13y ago
Of course not, but it's trivial to create a synthetic short position with an almost zero cash balance. Not EXACTLY zero, but close enough.
e.g. short a low beta stock, hedge that position, short the higher beta stock, and hedge that position.
- minimax 13y agoshort a low beta stock, hedge that position, short the higher beta stock, and hedge that position. That just sounds like gibberish TBH...
- Nrsolis 13y agoWhat part didn't make sense? If you're not familiar with "the greeks" as they relate to tradable securities, then why worry about hedging at all? Just buy and hold.
- minimax 13y agoHe is a retail trader. He's going to have to have a margin balance larger than "almost zero" to put together whatever sort of position you have in mind unless you're just talking about buying far out of the money puts.
- Nrsolis 13y agoYour almost zero might have fewer zeros than my almost zero. But my point still stands: it's trivial to create a synthetic short position that's dollar neutral.