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Playing & Trading Strategy

Here's another way to think of shorting and covering, instead of the borrowed-shares way it's done in the Real World ...

Posted by: Patient Player (a.k.a del_PCM_RichWood) on Aug 06, 13:04 in response to clonewars' post Covering

For HSX purposes, you can think of your stock/bond/fund/derivative holdings as being accompanied by a little arrow that says whether the value of your holding moves in the same direction as the price, or the opposite direction.

When you BUY stocks/bonds/funds/derivatives, you get a little "UP-value" arrow.  This means that when the stock/bond/fund/derivative's price goes UP then the value, to you, of holding that stock/bond/fund/derivative goes UP.  When the price goes DOWN, your value also goes DOWN.

SELL is, as others said, just converting your BOUGHT shares back into cash.

When you SHORT stocks/bonds/funds/derivatives, you get a little "DOWN-value" or "OPPOSITE-value" arrow.  This means that when the stock/bond/fund/derivative's price goes UP then the value, to you, of holding that stock/bond/fund/derivative goes DOWN (value goes opposite direction from the price movement).  When the price goes DOWN, your value goes UP (value goes opposite direction from the price movement).

COVER is, as others said, just converting your SHORTED shares back into cash.





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