SERVING THE QUANTITATIVE FINANCE COMMUNITY

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DominicConnor
Topic Author
Posts: 11684
Joined: July 14th, 2002, 3:00 am

I rarely trade equities on my own account, but have now become convinced that M$shares will bomb next year (my guess is Q3)By bomb, I mean 25-50% off current level.But I'm only a retail investor, how would I exploit this foreboding ? eh Posts: 494 Joined: March 2nd, 2010, 9:26 am Shorting Microsoft Replicate the tech sector using a few mega-cap stocks (Apple, IBM etc.) and buy a short tech sector ETF. rmax Posts: 6080 Joined: December 8th, 2005, 9:31 am Shorting Microsoft Contracts for difference?Spread betting?Pretty strong conviction. Is this becasue Windows 8 is rubbish? eh Posts: 494 Joined: March 2nd, 2010, 9:26 am Shorting Microsoft QuoteOriginally posted by: rmaxContracts for difference?Spread betting?Pretty strong conviction. Is this becasue Windows 8 is rubbish?Spread betting is a good suggestion. Traden4Alpha Posts: 23951 Joined: September 20th, 2002, 8:30 pm Shorting Microsoft If your conviction is based on the belief that this won't be "the year of the Windows Phone," then short MSFT (and NOK) and buy a mix of AAPL, GOOG, and/or a long tech sector ETF. If you think that Windows 8 desktop suckage will drive further cannibalization of PCs, then avoid being long on DELL, HP, etc. If you anticipate an imminent economic turbo-fecal collision and MSFT will bear the brunt, then just short MSFT.If you can't short any stock in your own account, then something like eh's strategy could work but you'll need to look carefully at the composition of the short ETF. rmax Posts: 6080 Joined: December 8th, 2005, 9:31 am Shorting Microsoft QuoteOriginally posted by: ehQuoteOriginally posted by: rmaxContracts for difference?Spread betting?Pretty strong conviction. Is this becasue Windows 8 is rubbish?Spread betting is a good suggestion.Why not CFDs? celala Posts: 16 Joined: November 28th, 2011, 9:18 am Shorting Microsoft long sector ex MS and long a short sector ETF is not really a very convenient way if you cant time it very well. you will have to rebalance quite a bit, so setting that up as a long run is trade is probably not the way to go. you can check if there is single stock futures out there on Microsoft. some banks may also offer short turbo's, but then again, the knock-out makes this not really a long term strategy, but rather a good tool for a short term view. so, single stock future seems to be the best way imo, if available BramJ Posts: 372 Joined: January 10th, 2006, 2:01 pm Shorting Microsoft buying puts? eh Posts: 494 Joined: March 2nd, 2010, 9:26 am Shorting Microsoft QuoteOriginally posted by: rmaxQuoteOriginally posted by: ehQuoteOriginally posted by: rmaxContracts for difference?Spread betting?Pretty strong conviction. Is this becasue Windows 8 is rubbish?Spread betting is a good suggestion.Why not CFDs?I can set up a spread-betting trade in minutes and trade a small amount. I guess to set up a CFD contract I would have to open an account with an IB, which is more hassle (although this is a guess). ppauper Posts: 70239 Joined: November 15th, 2001, 1:29 pm Shorting Microsoft QuoteOriginally posted by: BramJbuying puts?Dom has access to Professa' Wilmott, but asked here ?MSFT (pronounced mr softee ) was 29.23 last I checked.Dom said>> have now become convinced that M$ shares will bomb next year (my guess is Q3)I take it he means Q3 2013.Long-term Equity AnticiPation Securities (LEAPS) are available at CBOE for 2014.Over at the Nasdaq,puts on MSFT have expirations of Jun 2012, Jul 2012, Aug 2012, Sep 2012, Oct 2012, Jan 2013, Jan 2014http://ca.finance.yahoo.com/q/op?s=MSFT&m=2014-01Of these, only the Jan 2014 fit his time criterion>> By bomb, I mean 25-50% off current level.they're roughly 30, so you're forecasting 15 to 22.50With the puts, you'll only lose the money you put up up front.
Last edited by ppauper on June 7th, 2012, 10:00 pm, edited 1 time in total.

BramJ
Posts: 372
Joined: January 10th, 2006, 2:01 pm

Shorting Microsoft

I didn't mean to ask it, I meant to suggest it as an easy way for a retail investor to get short exposure.

ppauper
Posts: 70239
Joined: November 15th, 2001, 1:29 pm

Shorting Microsoft

QuoteOriginally posted by: BramJI didn't mean to ask it, I meant to suggest it as an easy way for a retail investor to get short exposure.I didn't mean you were asking, I meant DCFC was asking !

rmax
Posts: 6080
Joined: December 8th, 2005, 9:31 am

Shorting Microsoft

QuoteOriginally posted by: ehQuoteOriginally posted by: rmaxQuoteOriginally posted by: ehQuoteOriginally posted by: rmaxContracts for difference?Spread betting?Pretty strong conviction. Is this becasue Windows 8 is rubbish?Spread betting is a good suggestion.Why not CFDs?I can set up a spread-betting trade in minutes and trade a small amount. I guess to set up a CFD contract I would have to open an account with an IB, which is more hassle (although this is a guess).Might have to open an account with an IB - but Barclays have a retail CFD portal. UBS might have one too, but it is a longtime since I looked.

MORON
Posts: 7
Joined: July 13th, 2010, 2:45 pm

Shorting Microsoft

just wondering ,isn't shortng the cash stock also an option - simplest !very liquid - so no stock borrow probs open a margin a/c with anyone like IB etc
Last edited by MORON on June 13th, 2012, 10:00 pm, edited 1 time in total.

ppauper
Posts: 70239
Joined: November 15th, 2001, 1:29 pm

Shorting Microsoft

>> but have now become convinced that M\$ shares will bomb next year (my guess is Q3)he'd have to keep a short in place until Q3 2013, and post margin until then, which may or may not be a problem