Model InformationCategory : Signal And Noise Model Name : ShortStock.jar Author : MS4 Systems # of Download : 9 Updated Time : 2021-12-30T11:16:45.261Z |
Summary of ModelEnacts a scenario in which a trader follows the short selling stock strategy (p. 355 of The Signal and The Noise.) Detail DescriptionThe trader borrows stock shares from a stock owner promising to return them in a year. This is because she believes they will depreciate in value by that time. She then sells them to a broker at the current price. After a year, she buys them from the broker and gives them back to the owner. If the price has indeed gone down, then she pockets the difference and makes a profit. On the other hand, if the price has risen, she loses the difference ? which can be unbounded in value since it depends on how much the price has increased. Also, the stock owner can ask for the stock return before the due date in which case the same contingencies hold. How to set instance variablesNo specific Instance Variables Picture link![]() |