Started By
Message

I have a really stupid and dumb (or both) question about shorting a stock...

Posted on 1/26/16 at 10:30 am
Posted by The Egg
Houston, TX
Member since Dec 2004
79330 posts
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.
Posted by TigerDeBaiter
Member since Dec 2010
10274 posts
Posted on 1/26/16 at 10:41 am to
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.
Posted by LSURussian
Member since Feb 2005
127152 posts
Posted on 1/26/16 at 10:43 am to
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?
This post was edited on 1/26/16 at 11:02 am
Posted by barry
Location, Location, Location
Member since Aug 2006
50382 posts
Posted on 1/26/16 at 10:47 am to
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
This post was edited on 1/26/16 at 10:50 am
Posted by poochie
Houma, la
Member since Apr 2007
6420 posts
Posted on 1/26/16 at 10:48 am to
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.

Posted by Fat Bastard
coach, investor, gambler
Member since Mar 2009
73653 posts
Posted on 1/26/16 at 11:04 am to
quote:

how does one short a stock?


Ever heard of going "short" on a commodity futures contract?

Just like you can go "long"

Posted by geauxbears08
Houston, TX
Member since Jun 2011
224 posts
Posted on 1/26/16 at 2:38 pm to
If you're gonna short stocks, just start trading options instead.
first pageprev pagePage 1 of 1Next pagelast page
refresh

Back to top
logoFollow TigerDroppings for LSU Football News
Follow us on Twitter, Facebook and Instagram to get the latest updates on LSU Football and Recruiting.

FacebookTwitterInstagram