Bitcoin Related Stock

Discussion in 'General Trading Discussion' started by Rider, Dec 29, 2017.

  1. Rider

    Rider Member

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    Is anyone considering shorting RIOT next year? It’s a play if you believe the bitcoin rally is coming to an end.
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I have been in and out of this one in recent months.

    I think blockchain related stocks in general are likely much better mid to longterm investments than the coins.

    RIOT is certainly speculative and is quite rich at these levels, but I'd be very careful about actually shorting it for any length of time. It is quite volatile, and is known to spike up very high in very short time periods.

    These small cap stocks can occasionally continue going up to quite irrational levels for longer time periods than expected. And although a stock can only lose 100% of its value, it can in theory go up infinitely.

    Put options on it are relatively cheap right now and are safer IMO. I tend to use actual short positions rather carefully - either very short term (usually intra-day) on more volatile securities, or else sticking to shorting (for any length of time) the larger, less volatile companies that have (likely temporarily) gotten ahead of themselves.

    Personally, just because I may sell completely out of a holding doesn't mean I will then short it. The security may stall out or continue going up after I sell out. And I often only sell a portion of a position - I may keep half or less of a long position on, and may scale out (or down) gradually.

    An example of when shorts on hi-beta small caps go wrong: https://www.investopedia.com/articl...-short-sellers-account-went-negative-106k.asp
     
  3. longtermbull

    longtermbull Administrator Staff Member

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  4. Rider

    Rider Member

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    Excellent info guys. Thank you JR, very good article and info!!
     
  5. gowiththeflow

    gowiththeflow Senior Investor

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    What are your your views on cryptocurrencies now Rider? After reading JRs article and the volatile swings of late.
     
  6. Rider

    Rider Member

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    I’m steering clear, that article was an eye opener.
     
  7. gowiththeflow

    gowiththeflow Senior Investor

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    I'm with you Rider - if I dont fully understand something, I find it difficult to investment money into it.
     
  8. longtermbull

    longtermbull Administrator Staff Member

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    There are so many cryptocurrencies out there today it is difficult to know where to start. We hear stories of investors switching between different currencies but with such volatility it is difficult to tell. Is this simply a case of fighting back against the establishment or are cryptocurrencies here to stay in the long term?
     
  9. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Glad I could be of help.

    Are you the same "Rider" from TID bodybuilding board?
     
  10. Rider

    Rider Member

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    Yes I am. Good to see you here as well brother! ;)
     

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