As described, you can close the shorts periodically (say monthly) and/or the loss reaches a specific amount (I use 20% and 25% for volatile stocks).
When the market has a temporary down (such as more than 1% loss in this rising market in 2021), I close all my shorts.
The following is what I did on 09/29/2021.
|
Stocks |
Short Date |
Close date |
Duration |
Return |
Annualized |
|
ACVA |
06/10/21 |
09/29/21 |
111 |
22% |
72% |
|
CCL |
07/14/21 |
09/29/21 |
77 |
-8% |
-36% |
|
CENX |
09/17/21 |
09/29/21 |
12 |
3% |
105% |
|
CLOV |
09/16/21 |
09/29/21 |
13 |
10% |
291% |
|
CSPR |
09/16/21 |
09/29/21 |
13 |
33% |
917% |
|
EOSE |
09/15/21 |
09/29/21 |
14 |
10% |
261% |
|
MILE |
07/22/21 |
09/29/21 |
69 |
53% |
279% |
|
NCLH |
07/27/21 |
09/29/21 |
64 |
-5% |
-27% |
|
REAL |
06/04/21 |
09/29/21 |
117 |
22% |
68% |
|
UAVS |
06/04/21 |
09/29/21 |
117 |
41% |
127% |
|
|
|
|
|
|
|
|
Average |
07/30/21 |
09/29/21 |
61 |
18% |
206% |
|
RSP |
|
|
|
0% |
-1% |
|
|
|
|
|
|
|
Comments and explanations.
· It is for education purposes and I am not responsible for any errors. As in most parts of this book, commissions, dividends and fees (interest for shorts) are not included, and hence the returns are less than specified. They are real trades for the period.
· When they were more than one trade on the same stock, I use the price of the one with the largest quantity.
· Two small losers and 8 winners. The average return is 18% and is quite good especially in the rising market in 2021. I usually recommend shorting stocks in a falling market.
· The annualized returns have been exaggerated for durations less than 30 days to me.
· “Short date” is the same as “Sell date”, while “Close date” is the same as “Buy date”. As in shorting, you sell before you buy.
· I recommend closing the short positions after a holding period of 30 days unless you have reasons to hold the shorts longer. In this case, holding two months is optimal.
· I closed all positions on 09/29/21 and I could have higher profits by lowering the close prices.
· RSP is used as a yardstick. It is similar to SPY, an ETF consisting of S&P 500 stocks. It is a better yardstick, as it is weighed evenly. In this period, the market is flat.
I did the same on 11/17/21 and used 97% of the current prices to close (buy) the stocks.
|
Stocks |
Short Date |
Close date |
Duration |
Return |
Annualized |
|
BBIG1 |
09/30/21 |
11/19/211 |
50 |
35% |
258% |
|
BFLY |
09/30/21 |
11/18/21 |
49 |
14% |
107% |
|
EOLS |
11/10/21 |
11/17/21 |
7 |
10% |
523% |
|
FLDM |
10/13/21 |
11/18/21 |
36 |
14% |
147% |
|
MKFG |
10/27/21 |
11/18/21 |
22 |
-9% |
-149% |
|
PAVM1 |
10/20/21 |
11/19/211 |
30 |
34% |
413% |
|
TSP |
10/05/21 |
11/18/21 |
44 |
-11% |
-91% |
|
VRM |
10/13/21 |
11/17/21 |
35 |
13% |
135% |
|
|
|
|
|
|
|
|
Average |
10/14/21 |
11/18/21 |
34 |
13% |
168% |
|
RSP |
|
|
|
4% |
294% |
|
|
|
|
|
|
|
1 As of early morning of 11/19/21, these two stocks have not been closed and I used the morning prices and 11/19/21 as the Close Date. Will try to close these two positions later today.
All the comments / explanations of the first table still hold. Here are the comments specific to this table.
· Due to the market and the lower close prices, I only closed two positions on the first day, 4 on the second day and still 2 unclosed on the third day.
· There are two losers and six winners.
· The “Annualized Return” has been distorted. I prefer to stick with “Return”, and 13% Return is quite good, especially RSP (representing the market) is up by 4% in the same period.
--------------
The above is from my book "Sell Short Stocks / ETFs".
https://www.amazon.com/dp/B08KMSTHZH
