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Science post: How to short correctly Since May, my three most heavily weighted short trades were: The first short was on eth. At the time, I opened a hype long and an eth short—my intention was to hedge. The logic was that in the crypto market, without new incremental capital entering, the hype ETF would absorb the existing capital from the eth ETF. From 2000 short to 1600, profit was 5wu. The second short was on mstr. The logic was that MicroStrategy’s funds were running out, so they had no choice but to issue more shares to avoid blowing up. They gradually placed many short positions from 130 down to 80, profit 5wu. The third short was on spaceX. The logic has been mentioned in a longer post before. From 160 short to now, unrealized profit is 8wu and I haven’t taken profit yet. Common features of these three assets: 1. The project/company itself isn’t profitable. 2. The float is loose, with a large amount of sell orders. Shorting is a riskier trade than going long. On the basis of the principal being doubled, long positions never get liquidated, while shorts blow up if they get pulled up by one times. So for shorting, safety matters more than upside magnitude. I generally use the following indicators to judge whether it’s safe: 1. Whether a big surge could happen due to news or announcements. 2. Whether the company/project itself has profitability, and whether there’s any expectation of buybacks. 3. Whether there are forced/active sellers continuously dumping. To sum it up as principles: 1. Don’t short “meme” coins, because market makers control the float. 2. Don’t short profitable projects/companies. That’s it 🙂‍↔️ $BTC $ETH $SOL #SP500Hits7700 #AMDBeatsButDrops #AMDBeatsButDrops