Strategy Guide Note: Pretty gung-ho stuff from Jimmy. You might want to get a feel for the game first before you take too many risks (-Huy).

To become a good trader on HSX you need to do your homework. Obviously you must study movies. Know what the outside world believes are worth their $8.50 (or whatever them crazy theaters are charging these days). Research old movies to get an idea of how particular genres perform at certain times of the year. Make a list of what you think each upcoming movie will make on its opening weekend (don’t forget the competition) and multiply it by 2.9. This should give you an approximate “value” of each stock as far as you are concerned. Look for deals, both underpriced and overpriced and long/short oppropriately. And so on.

This is old school knowledge. I thought I’d also pass along a few “tricks” to try and jump start your port.

“Looking for Prophet in Jihad the right places.”

The most consistent money making oppurtunities are available with weekend openers. Choose right and your port can make significant gains in a very short term. Sometimes this decision can be easy (like when the $20-odd priced TWOHN recieved less than 1000 screens.Short! Short! Short!) But usually it’s based on your perception of how you think a movie will perform.

But there is something else to consider. The “potential for profit”. Let’s look at an example. STOCKX is priced at $30.00. You feel that on adjust it could rise as high as $31.00. Not much profit to be made there huh? So why not take a chance and short it? At worst, you lose $50,000 (assuming an adjust to $31). At best, STOCKX bombs and you end up with a few hundred grand. You can also reverse the process. For example, when BABYG dropped to $6.00, though it looked terrible, it really had little downside as a long buy. (And if you were smart enough to buy, you did well as it adjusted into the teens.)

“Take a chance”.

This is essentially an addendum to the above. If the risk is minimal, why not go for it? Let’s take the Oscar options for example. If, let’s say, OSWLR dips to $2.00, what’s your decesion? If you play the safe card you short and take your $20,000 and be on your way. But what happens if Ms. Redgrave pulls the upset and wins? Well, you’re out $230,000. Ouch. In this situation, a long hold would be preferable. If she loses, then you’re out $20,000, but pick up the $230,000 on the upset. Obviously, the chances for profit are more in your favor in the second instance.

Now, I’m not suggesting that you go long on all the options. Since 80% will cash out at $0, shorting, in most cases, would seem to be the way to go. This has been discussed (ad nausem?) on TT and in other columns, so I’ll leave the research up to you.

“Short on stocks, long on profits.”

V2’s greatest new feature is obviously the ability to short overpriced stocks and bonds, and to profit from their downfall. I’ve easily made more money shorting adjusting bonds (SMGEL, GPALT) and overpriced stocks (TWOHN, WINGC) than on anything I’ve held long.

But shorting in itself has a built in advantage over buying a stock long. It’s called re-shorting. I’ll leave the math to ROI expert Tom Miller, but I’ll let you in on the basics. You short a stock, and once it drops and you have made a 20% or better return on yor money, you should consider re-shorting. By covering your short and shorting again, you free up money that can be used elsewhere. You still have your 50,000 shares, but now you have money to sink into other oppurtunities that you previously didn’t have. Don’t get carried away though. The “20% rule” is there for a reason, to keep you from wasting your profits on commissions.

I’m sure there are many more tricks that more experienced traders can give you. So scowr those fansites! I hope this helps.

Off with their hot pants!
Jimmy Impossible