STO 0.45% $6.70 santos limited

just a quick comment on short positions. It is important that...

  1. 450 Posts.
    just a quick comment on short positions. It is important that people understand that a short position isn't always a bet that the stock is going to plummet. Many stocks have short positions recorded, in both bull and bear markets.

    A traditional hedge fund, who loves a sector, for example, may buy his most favoured stocks in a sector, and short his least favourite. In that case, wishing to remain hedged, he will not care if the shorted stock goes up 30%, as long as the stocks he held in the same sector went up 40%. That would be a long/short hedged position. He will make 40% on the long, and lose 30% on the short - he was betting that one stock would outperform the other, but was also hedged incase the sector took a hit. His long may have gone down, but his short would likely have profited. This was the original idea behind hedge funds.

    Many other scenarios's involved with shorts, such as for issue of a CFD or other derivative contract - not always a grinch type critter lurking in the shadows trying to make a buck at Mum and Dads expense.

    Anyway - thought it was worth mentioning, as I don't like to see upset investors in here getting tied in a know with worry.
 
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