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To: rebel_yell2
And, it should be mentioned, one could very conceivably ratio the long and short bets to potential advantage; the caveat being that nobody can predict the future.

Suppose, for example, that you really really liked living in your house, but were strongly convinced it would decline in value. You could go more short than long, very much like overinsuring in the intended effect. These proposed futures would make such an exercise perfectly feasible and legal [which it currently is not!] If you were convinced your $500K home would fall in value to $400K, you could short double the number of futures contracts req'd to hedge a constant value in your home. Home falls to $400K, you cover half your short, pocket $100K, and the combination of home + short futures contract would still maintain a constant $500K value. Kewl?

5 posted on 03/23/2006 11:12:16 PM PST by Attention Surplus Disorder (Funny taglines are value plays.)
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To: Attention Surplus Disorder
Eat my shorts....

But seriously...every short position must eventually be liquidated, thus purhased so is essentially bullish.

6 posted on 03/23/2006 11:17:24 PM PST by spokeshave (I'd rather go hunting with Dick Cheney than drive over a bridge with Ted Kennedy)
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