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Started By
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I have a really stupid and dumb (or both) question about shorting a stock...
Posted on 1/26/16 at 10:30 am
Posted on 1/26/16 at 10:30 am
how does one short a stock?
Again, this is going to sound like a retarded thread, so flame away if necessary.
I've always only just bought and sold, but have never shorted anything.
Again, this is going to sound like a retarded thread, so flame away if necessary.
I've always only just bought and sold, but have never shorted anything.
6
Posted on 1/26/16 at 10:41 am to The Egg
You are borrowing shares in hope to buy back at a later date (at a lower price) to turn a profit.
That's the simplest explanation.
To do so, you "sell short" a position, in stead of "buying long".
Have a stop.
That's the simplest explanation.
To do so, you "sell short" a position, in stead of "buying long".
Have a stop.
Posted on 1/26/16 at 10:43 am to The Egg
It depends on what trading platform you use.
Schwab has a transaction menu on its trading platform that includes "Buy, Sell, Short." If you click on 'short' and enter the number of shares, the price per share you want to short sell at and company symbol and then submit the order, Schwab handles the rest.
To close out the short position you have to "buy" the stock. Newcomers to shorting often get confused and think they have to sell their position. But by shorting, you have already 'sold' the shares, even though you don't own them.
You have to have certain margin or cash requirements to enter a short order.
And you can only short stocks in a taxable account, not an IRA.
Anything else?
Schwab has a transaction menu on its trading platform that includes "Buy, Sell, Short." If you click on 'short' and enter the number of shares, the price per share you want to short sell at and company symbol and then submit the order, Schwab handles the rest.
To close out the short position you have to "buy" the stock. Newcomers to shorting often get confused and think they have to sell their position. But by shorting, you have already 'sold' the shares, even though you don't own them.
You have to have certain margin or cash requirements to enter a short order.
And you can only short stocks in a taxable account, not an IRA.
Anything else?
This post was edited on 1/26/16 at 11:02 am
Posted on 1/26/16 at 10:47 am to The Egg
First you need a margin enabled account. Second you go to the trading screen and select short instead of buy. Thats it. To close out your position just purchase the same amount of the stock later.
eta: If you do this, have a stop-loss price in mind and set a trade execution for that price. If not the stock could take off on you in a split second and your fricked
eta: If you do this, have a stop-loss price in mind and set a trade execution for that price. If not the stock could take off on you in a split second and your fricked
This post was edited on 1/26/16 at 10:50 am
Posted on 1/26/16 at 10:48 am to The Egg
From what I understand, say a stock is $100 today and you think it will go down to $50.
If you short the stock, someone "gives" it to you for you to do what you will in exchange for its value today. You sell it for $100 and have $100 cash in hand. When it goes down to $50, you buy it back for $50.
You give the stock back and you keep the difference ($50). You can only gain of the stock goes down.
If it goes up, you could potentially lose infinite money.
If you short it at $100 and it goes up to $150, you have to buy it back at $150 and you lose $50.
If you short the stock, someone "gives" it to you for you to do what you will in exchange for its value today. You sell it for $100 and have $100 cash in hand. When it goes down to $50, you buy it back for $50.
You give the stock back and you keep the difference ($50). You can only gain of the stock goes down.
If it goes up, you could potentially lose infinite money.
If you short it at $100 and it goes up to $150, you have to buy it back at $150 and you lose $50.
Posted on 1/26/16 at 11:04 am to The Egg
quote:
how does one short a stock?
Ever heard of going "short" on a commodity futures contract?
Just like you can go "long"
Posted on 1/26/16 at 2:38 pm to The Egg
If you're gonna short stocks, just start trading options instead.
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