My comment was that taking a long term short position could be an awful return on investment if the stock won't move in your direction for months. If you're long on a future stock, there's a good chance that'll it'll rise on new info/footage as well as being bought by new players. A short position however, likely won't bear fruit until reviews/sales data come in.
There's risk with both positions in the long run, true. But I believe that the nature of this game favours long rather than short for upcoming games.
Isn't that a problem for all stocks here that aren't coming out for a long time and the problem is the same when you decide to take a long position instead of a short one? Personally I'm staying away from all of games that aren't coming out for a long time, except maybe during an IPO.
That's a terrible strategy. Sales numbers won't be out for these games for another six months and the price may not fall (it will likely rise with further game announcements), and you're just wasting your money when it could be better spent on more short term plays.
Just short sell both stocks if you're certain together they're far too high. If you sell the same amount of stocks for both platforms it's not even important to make a good estimation of how sales will be split between XBox 360 and PS3.
When this game arrives and stalls out around 3-5 million, then can we get serious and bring this projection down to reality? PS3 doesn't have the installed base to support these numbers, period, and all predictions say neither 360 nor PS3 will ever have the base to support the total sales seen by any of the GTA releases last generation. Maybe GTA IV-Massapequa or whatever they come up with next, but not GTA IV.
Recently, I've maxed out my position on a certain stock. During a recent rally, it moved to well above 25% of my port (I'm a new player). The stock was not liquidated, it simply prevented me from purchasing more until it became worth lower than 25% of my worth again.
The rule works proactively. When trying to buy over 30%, the trade is blocked. When they implemented the rule, Brian said if you already had a larger position, they would not liquidate it. However, I think they target large positions first in margin calls.
Furthering what Delta had said. I am wondering about the 30% diversification rule, which is that people on the SE are not allowed to have more than 30% of their net worth in 1 stock. Is this applied proactively so that the SE will not allow them to buy more once they reach 30% OR is this applied retroactively so that after they have over 30% the SE will automatically start selling their shares to bring them down to 30%? I think its probably proactive, but throwing this out there because its another possibility as to why huge stocks might see drastic drops a day or two after their IPO.
Both stocks are down. Remember, one of the downward forces on the simExchange is selling as a result of margin calls. A lot of times, people over extend themselves on the IPO, hoping to make a quick buck.
This certainly happened with GTA IV (Xbox 360) as the stock was up like 10% yesterday. Part of the selling was profit taking, part of it was the people who had bought so much and boosted the stock price up so high, they were over extended and had to sell. Some people may have bought into the PS3 version's IPO hoping for a quick pop and didn't get it. They then sold to get their money back to play another IPO.
I personally don't think the IPO play has been workable since the Spore IPO last year (before the current IPO system was in place).
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If you're long on a future stock, there's a good chance that'll it'll rise on new info/footage as well as being bought by new players. A short position however, likely won't bear fruit until reviews/sales data come in.
There's risk with both positions in the long run, true. But I believe that the nature of this game favours long rather than short for upcoming games.