For questions related to the trading practice of short-selling, which involves selling securities or financial instruments that one doesn't own with the intention of repurchasing them at a lower price.

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21 views

When do I need to return short stock to the lender

Borrowing stock to short is like taking out a loan. You pay back the principal upon maturity plus interest. Interest in this case refers to short stock fees and dividends. So, what is the equivalent ...
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3answers
51 views

Why don't forced buy-ins of short sold stock happen much more frequently?

When you short sell a stock, you are borrowing the stock from a lender, and the lender always has a right to say that they need their shares back, which might result in a forced buy-in by your broker. ...
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1answer
23 views

What margin is required to initiate and maintain a short sale

If I short 100 shares of a stock trading at 20$, what is my initial margin and my maintenance margin that I need to maintain with my broker? I have a REG T margin account.
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1answer
40 views

Do I retain the dividend if I buy back a short stock before the ex dividend date

Let us say I am short a stock ABC. I buy the stock back on the ex dividend date. Now, when I buy the stock, I have to return it to the original lender that loaned me the stock,correct? If that is the ...
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1answer
74 views

How does shorting ETFs work? What are the costs and tax implications?

If I short an ETF stock, how does it work from the cost and tax perspective? Do I get charged ETF expense ratio? (does not make sense to me) If underlying stocks issue dividends, am I charged them? ...
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1answer
44 views

What happens when short interest exceeds outstanding shares

Let us say there are 100 outstanding shares of company X held by investor A. Investor B comes in, borrows these 100 shares and short sells them to investor C. Which means, outstanding shares=100, ...
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2answers
64 views

Exercise a put option when shorting is not possible

Sometimes when I want to short a stock, my broker says that no shares are available for borrowing. In this situation, can I buy a put and exercise it immediately and end up with a short position? in ...
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2answers
79 views

Is it easier for brokers to find shares to short in premarket?

Recently I have had trouble finding the shares to short for positions I want to take at the start of open hours. Is it easier for a broker to find the shares in premarket when the stock is likely to ...
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2answers
67 views

Why buying an inverse ETF does not give same results as shorting the ETF

I was reading on the pros and cons of shorting an ETF vs buying an inverse ETF on yahoo I do not understnad this explanation why over hte logner term, shorting is not equivalent to buying an inverse ...
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2answers
999 views

Shorting Obvious Pump and Dump Penny Stocks

Obviously there is a lot of risk involved, but I routinely see penny stocks (OTC) climb to unreasonably high levels of growth over very short periods of time (1-3 days), sometimes up to 9000% growth. ...
2
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2answers
120 views

What kind of symbol can be shorted?

I am new to sell short concept. but I'm interested because I think some stocks may go weak in the future. I am using Firstrade but when I try to sell short some stock, it told me This symbol cannot ...
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1answer
36 views

Short position with bullish outlook

I am just starting to learn about options and about puts and calls. Traditionally, I assumed that being short on a position means having a bearish outlook to the market. However, when you are an ...
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4answers
85 views

Shorting versus selling to hedge risk

If you own 10K shares of stock XXX and you want to hedge your investment, isn't shorting some of your XXX identical to simply selling some of your XXX? Doesn't either approach reduce your risk in the ...
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2answers
71 views

Where can I find information on the percentage of volume is contributed by shorts?

Is it possible to get the information as to what percentage of the average daily volume of a stock or ETF is due to short sellers? This can mean either people selling short or buying back to cover ...
6
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1answer
962 views

How to bet against the London housing market?

A lot of people are talking about a property bubble in London and I was wondering: how could you short the property market and bet on a crash? Is there any obvious way? Basically, how could someone ...
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2answers
255 views

How to calculate how far a shorted stock's price can rise before broker issues a margin call?

If I short AAPL at 500$, how much can the stock rise before I get a margin call? Does it depend on how much Cash/Equity in other stocks I hold in my margin account? I just thought that if margin ...
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1answer
200 views

Does the uptick rule apply to all stocks/ETFs and other securities, or only specific ones?

Does the uptick rule on U.S. securities apply universally across all stocks, all bonds, all futures and all options? Or is it limited to certain category of securities/instruments? Is there a ...
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1answer
293 views

What happens if a company you hold short merges with another company?

I know how mergers (typically) work when you're long a company, you simply get shares in the merged company equal to your previous market value. But what happens if you hold a short position? The ...
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1answer
560 views

What does it mean when the broker does not have enough shares to short?

I recently opened a margin account at Questrade with 1000 dollars to see if I can learn anything about margin trading. Today, I'm trying to short sell 2 shares of XLU at a $40 limit price and it ...
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2answers
886 views

What to do if a company goes bankrupt after I short the stock

If I short a stock and then the company goes bankrupt, what obligation do I have to fulfill to my broker? I can no longer buy the stock back because the stock (i.e. the company) no longer exists, so ...
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1answer
179 views

Can I short a stock in UK using a shares ISA?

If not please advise on other straight forward method (hoping I don't have to open a complicated account for this). Thanks
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1answer
118 views

Is naked short selling illegal

From the wiki article on naked short selling It is not clear whether this practice is illegal ,or only limited to hedge funds and institutions. I say this because at least my discount brokerage ...
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3answers
75 views

Who gets the margin call when a bear ETF goes down

When I short the SPY, if it goes up, then I get a margin call based on broker's margin requirements. (Not sure if margin requirements are specified by SEC or individual broker, but that is another ...
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3answers
306 views

What do brokers do with bad stock?

I'm new to financial markets and how they work is still fuzzy, so bear with me. This question actually has multiple questions :( ... and a bit of a story. I was watching a YouTube video on the ...
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3answers
266 views

Short Selling Specific to India

I'm trying to short sell for the first time and when I asked my broker he says that only Intraday short selling is allowed.That really didn't make any sense as the articles I read said I can short ...
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1answer
808 views

Can you short a stock before the ex-div. date to make a profit?

If the price of a share automatically declines the same amount as the dividend on the ex-div. date why don't people short the stock right before the ex-date and then when the share price drops ...
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1answer
361 views

What would stop someone from taking advantage of wide bid-offer spreads in extended hours trading via short selling?

I understand that the less volume occurring in a security, the less liquidity (the wider the bid-offer spread). So my question is, in pre-market and after-hours trading, when bid-offer can widen ...
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2answers
678 views

Why does the calculation for percentage profit vary based on whether a position is short vs. long?

In this link here, the point: In a market in which upswings are likely to equal or exceed downswings, heavier position should be taken for the upswings for percentage reasons - a decline from ...
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1answer
3k views

What is the “Short sale circuit breaker rule”?

Apparently there's a NASDAQ rule called something like short sale circuit breaker which limits how much a stock can be sold short after a certain drop in price or something like that. It really makes ...
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1answer
803 views

Is 'days to cover' a useful metric in identifying the potential for a short squeeze?

When talking about short interest, the 'Days To Cover' is the avg number of days it will take to cover the short position and bring the short interest to 0. But is this figure actually of any use? It ...
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1answer
93 views

How do we know the number of shorted shares of a stock?

I am reading this article which discusses Tesla's stock (TSLA). The article states: 27.5 million shares of Tesla are held short, or about 41 percent of the float. How can the number of shorted ...
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1answer
550 views

What does the settlement date of short interest mean?

NASDAQ lists data like this for the short interest in Walmart: Settlement Date Short Interest Avg Daily Share Volume Days To Cover 4/30/2013 27,988,175 7,442,123 ...
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1answer
298 views

When shorting stock, why does buying to cover help limit a trader's loss when the stock rises?

In these investopedia articles, they are giving the impression that 'Buying to Cover' is preferable than getting a margin call: Investopedia - Buy To Cover Definition Investopedia - Short Covering ...
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2answers
112 views

Can i short securities in a normal(non-margin) account

When I take up a short position, I borrow stocks from my broker and sell them on the market. Does the broker charge interest for this? Also to do this, do I need a 'normal' account or a margin ...
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2answers
380 views

How can I make a profit by selling a stock short?

This link states: Shorting (or selling short) allows professional traders to profit regardless of whether the market is moving up or down, which is why professional traders usually only care ...
2
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1answer
114 views

Insider trading of a linked security like an ETF your company has a heavy weighting in

Let's say you work for Apple, Inc as a middle class employee. This is a large publicly traded company. By the very nature of your employment there will be limited times that one can make purchases and ...
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2answers
143 views

Consequences of not closing an open short sell position?

If I short sell stocks of a company but do not close my position by buying them back, what will happen? I realize it is a bad thing, but what exactly? I will need to pay a penalty?
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2answers
157 views

Please explain short interest; specifically, why is it called “interest”?

I understand that short interest is the number of shares that is currently short sold. A high short interest indicates that the share price is expected to fall. All good, but what is the word ...
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1answer
254 views

Can I cover a short sale with the stock I already own?

Example Scenario: I short 100 shares of company XYZ. Incidentally, I also own 100 shares of XYZ. The price of XYZ goes down and I need to cover my short sale. Question: Can I cover using the 100 ...
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2answers
161 views

Can Indian citizens in India do short-trades in the US?

I have learned of some services that allow Indians to invest in US stocks. However, does anyone know if short-trades are possible through any of these services?
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3answers
352 views

If prices are falling, who will lend shares to short sellers?

Short selling is a process that involves borrowing shares from a person, selling them and then buying them back at a lower price, thus realizing a profit. In this situation, knowing that prices are ...
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1answer
136 views

Borrowed shares how are they tracked?

When a short position is opened in the stock market how does the brokerage know whether the trader has actually borrowed the shares or not?
4
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2answers
159 views

Professional investment planning for small net-worth individual in bearish market

I would like to find an investment planner that can help me achieve moderately aggressive growth when the stock market is expected to go down. Perhaps he would use shorts and other more short-term ...
4
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3answers
170 views

How to exclude stock from mutual fund

One of the mutual funds I invest in is indexed to the S&P/TSX Composite Index. I have a moral objection to one of the companies who makes up a small part of this index. Hypothetically, is there a ...
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1answer
506 views

Wells Fargo Brokerage has no shares of stock to short

I want to short several hundred shares of a stock. Wells Fargo brokerage has no shares to short. Would a different brokerage be likely to have access to shortable shares, or do they all access the ...
4
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1answer
518 views

Short-selling treasuries instead of borrowing on margin?

Let's say I have a diversified investment portfolio, and I wish to tap a relatively small amount of cash (less than 5% of the portfolio's value) without liquidating any of my positions. I could ...
6
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1answer
941 views

Why can't I short a particular stock?

I would like to short a particular popularly traded stock, but when I attempt to do so I keep getting this message all the time: "Order rejected: This stock is not available to borrow. If you want us ...
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1answer
293 views

Is there a way to tell how many stocks have been shorted?

When investigating a particular stock it is nice to know how many stocks have been shorted. Is there a way of finding out how many stocks have been shorted (for a given stock)?
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2answers
213 views

Can the shorting of S&P futures negatively affect the underlying index and constituent stocks?

I hear people on financial shows talk all the time about index futures like SPY and QQQQ affecting the actual index. Can shorting these futures (in huge quantities obviously) cause the underlying ...
6
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3answers
3k views

If I short-sell a dividend-paying stock, do I have to pay the dividend?

If I hold shares of a stock on the ex div date, I get a dividend. But if instead I were to short-sell the stock and not buy it back before that date, would I then be responsible for paying the ...