Covered short on TXN and now buying

Discussion in 'Stocks' started by hajimow, Sep 22, 2010.

  1. hajimow


  2. hajimow


    Sold my long position made yesterday and shorted again at 25.95. It will drop again soon.
  3. Ok, TXN is $28.72 now pretty much trending up the whole time. So your short is a loss of 11% if its stocks and probably 90%+ if its short term put options.

    Even taking a short the stock today I would say you will lose another 11% by end of year. Do you really want to take a 20% haircut before you have any realistic chance to make money on a short ?

    The time frame is pretty short so these losses are quite massive. Yet you have since posted at least 3 times more to short TXN and other tech stocks. Such horrible advice, now is totally the wrong time for this strategy. TXN has broken out on the upside and if you can't remember the potential for technology to power up on a trend you are too young to be investing in technology.

    Of course, you could luck out somewhat if the overall market drops. But you would still be wrong, because the downside potential in other sectors is much greater. And the scenario to be horribly wrong buying puts on technology right now is quite likely even after a moderate run up in some stocks.
  4. hajimow


    I am glad to see that you were following my posts. I don't short and pray the stock to go down and I also don't put short stop losses. I only trade the stocks that I know them extremely well. TXN and ADI and a couple of them. If a position {in this case short call} goes against me, I take action to repair it by selling naked puts and then shooting it to the next month. I cannot explain exactly what I am doing on TXN but basically I never short a stock. and when I feel a stock might drop, I short naked Call. I don't buy put. I sell put for a stock which I believe is going up and in rare cases I do risk reversal. My performance YTD is 163%. When I am 100% sure that chip sector will warn for the next quarter, the only thing that I do is keep my position and shoot it to the next month (sell more time) and sell PUT to reduce the damage and rake the profit. If you expect that either me or anyone else when calls a stock a short, it drops 5 minutes later, that will never happen. I shorted GM at 22 and it went to 29 and Cramer called it a $40 stock and I did not give up and covered it at $1 and shorted CC (circuit city) at 14 and covered it less than $2. I will cover TXN when it drops below $24.
  5. Given your post that you are selling calls in such an instance, and the fact the stock gapped up the next trading day and has never looked back, you could not have avoided a huge haircut on this trade.

    There is no room for debate here, this is one of the instances where the stock gave you absolutely no chance to recover from a bad idea.