Hypothetical Situation, maximizing profits

[davidwm88]

Need a little advice....on this hypothetical situation.


Say that you know Stock A is over bought and you are in the neighborhood of 80-90% sure that the stock will drop a minimum of 20% over the period of the next 2-4 months.

Besides flat out shorting the stock, what other methods could be used to maximize profits? I am not very familiar with options, would this be the best method? Or is there another method?



Appreciate the advice,


David

 

[Rhody Trader]

If the stock has listed single stock futures you could go short there. Options, though, may be the best bet. You could buy a put option or employ any of a number of option spread strategies.

 

[William Waller]

Need a little advice....on this hypothetical situation.


Say that you know Stock A is over bought and you are in the neighborhood of 80-90% sure that the stock will drop a minimum of 20% over the period of the next 2-4 months.

Besides flat out shorting the stock, what other methods could be used to maximize profits? I am not very familiar with options, would this be the best method? Or is there another method?



Appreciate the advice,


David

If that is your method, long term I would say that the best way of maximising profits is staying out altogether.

 

[4xpipcounter]

You have a straightforward-in-your-face way of putting things, but you hit the nail on the head, and as always, never left any doubt what you are talking about.
Dave, to add what William said, if you don't have a sound preset way of entering and exiting the market, then your best at continuing demo trading until you have fully established one.

If that is your method, long term I would say that the best way of maximising profits is staying out altogether.

 

[William Waller]

You have a straightforward-in-your-face way of putting things, but you hit the nail on the head, and as always, never left any doubt what you are talking about.
Dave, to add what William said, if you don't have a sound preset way of entering and exiting the market, then your best at continuing demo trading until you have fully established one.

Sorry, didn't mean to come across harshly, you expressed my meaning much better than I did. It just sounds like the OP is trading based on feeling or tips, which long term I think is very likely to lead to disaster.

 

[4xpipcounter]

Believe me, I wasn't finding fault with your approach. Anyone that can just tell me exactly the way it is without beating it around the bush, I can always appreciate.
I also think it is best for newbies reading on to know exactly what the score is. They can save themselves a bunch of money by just taking heed to some good common sense.

Sorry, didn't mean to come across harshly, you expressed my meaning much better than I did. It just sounds like the OP is trading based on feeling or tips, which long term I think is very likely to lead to disaster.