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Kind of weird question about shorting when you have limited money
I had a million extra H$ and the news just came out about Jupiter Ascneding moving to Feb, so I shorted 17k or so shares of that using all the money I had. Then I got to thinking, the price is going down, and the value of my position is going up. So the question came to me, At what point would I make more money by covering, and re-shorting to get more shares?
I think starting with a scenario where we know where the price is doing could be helpful. Say the current price is H$50 and it's going down to H$30. I have H$1 million to spend. Short max at 50 and that's 19,800 shares. Hold to H$30 and I end up with H$1,372,140 (I think I'm doing the commission right, but not all the way sure).
Or I short at 50, cover and short again at 40, then cover at 30 where it lands. 19800 shares covered at 40, then re-shorting the max amount gives me 29,108 shares. Hold down to 30, cover and I'll end up with H$1,440,846.
Has anyone worked this out further? If it costs 2% to cover and re-short does that turn into an easy formula somehow that I'm now seeing?
Kind of weird question about shorting when you have limited money Jun 04, 09:51
Yeah, it's call re-shorting. All the billionaires are doing it. {nm} Jun 04, 14:34
lol {nm} Jun 04, 16:00
Covering Shorts frees up cash to spend on other things. Jun 04, 12:55
This {nm} Jun 04, 16:24
Interesting comments. I've never really put much thought into churning shorts. Kudos for +1 strategy! {nm} Jun 05, 08:35
Not perfectly accurate, but....... Jun 06, 04:44
