General Topics
Technical Topics
Brokerage Firms
Community Lounge
Site Support

# Weekly IQ test

Discussion in 'Trading' started by stock777, Nov 8, 2010.

1. ### stock777

Would you rather have shorted LVS from 150 to 1.50 or bought it at 1.50 and rode it to 55?

2. ### spindr0

What's behind door #3 ???

3. ### abattia

Colonel Mustard;
in the Library;
with the 26" monitor?

4. ### stock777

I expect a failure rate of approx 78%, which would be normal for ET

5. ### Soon2Bgreat

It depends.

Can I choose both?

shorted.

PS: you failed to indicate the time frame, which I think you assumed is the same for both alternatives, but I wonder if you realized the importance of time.

7. ### TheGoonior

Strictly based on the numbers, I'd have to say \$1.50 to \$55 based on capital outlay and risk-reward.

Equal shares comparison:
A) 1000 @ \$1.50 = Risk \$1500, Reward = \$53500.
B) 1000 @ \$150 = Risk \$150k, Reward = \$148.5k

Equal dollar comparison:
A) \$1500 gets you 1000 shares at \$1.50 with the same net (\$53.5k)
B) \$1500 gets you 10 shares at \$150, with a net of \$1485.

However, this question is a bit loaded, since there is no scenario information, etc. Also, \$1.50 price tags fall under my radar as things are usually that cheap for a reason.

8. ### Hydroblunt

Nope,

Long from 1.50, without even a doubt. It's all about return on your capital. Do some basic math and see how much money you would make on the first versus the second trade with \$15,000.

9. ### feng456

i would've longed simply because you can only lose 1.50 per share on the long side if all hell broke loose but when you short there's technically an unlimited risk

10. ### forsalenyc

are we learning ABC's now?

#10     Nov 8, 2010
ET IS FREE BECAUSE OF THE FINANCIAL SUPPORT FROM THESE COMPANIES: