All Questions
Tagged with short-selling or shorting-securities
305 questions
0
votes
2
answers
133
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What does "the position is also going against you" mean here?
I'm reading Hedge Fund Market Wizards, and there's one paragraph talks about shorting the housing market long before the crisis, and quote
They may not have a good business, but you know they are ...
- 707
0
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0
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48
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when have brokerages allowed covering a short by a long position that is exactly convertible to the short position (w/no additional margin)?
This question is a followup to this one.
Per US Federal regulation 12 CFR 220.12, in a US brokerage account, a short stock position must be covered by holding an offsetting long position of one of ...
- 103
0
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2
answers
97
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can one cover a short position in common shares by holding a long position in (convertible) preferred shares?
EDIT: I phrased this question ambiguously. The answer I've accepted suggests that the practice is probably legal in the US. I'd like to know whether any North American brokerages allow it in ...
- 103
1
vote
2
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155
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Can someone explain to me the best option strategy here?
NOTE: By "covered put" we mean covered by a short position, not a cash-secured put.
I have the following question from my SIE textbook:
If a customer had a large cash position and was ...
-1
votes
1
answer
270
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How do the fees for shorting stocks work?
Inspired by the comments to a previous question of mine.
Waiting for the stock to drop is especially painful to “short sellers,” who pay a fee to borrow shares owned by others. The idea is to quickly ...
- 2,997
2
votes
2
answers
963
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Why might there be a massive fee to short a stock?
Rooting for Trump to fail has made his stock shorters millions
Waiting for the stock to drop is especially painful to “short sellers,” who pay a fee to borrow shares owned by others. The idea is to ...
- 2,997
0
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0
answers
25
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Which short sale number is true in OTCBB or FINRA?
FINRA provide everyday's short sale data at the website:
short sale data
We can get field defination here field defination, Short Volume--Aggregate reported share volume of executed short sale and ...
- 433
5
votes
1
answer
308
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What's the tax treatment if I am charged for a dividend on a stock I am short?
I sold an option, and it was exercised, leading me to be short a stock going into ex-dividend. The brokerage charged me for the value of the dividend that was paid by the company, which happened to ...
- 181
0
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2
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164
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why would a forward ever have a premium?
In a financial derivatives lecture that I'm watching, the professor brings up an example of where someone might want to use futures. A hedge fund holds a large proportion of Company ABC's shares, ...
- 89
-1
votes
1
answer
96
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Price Spike in Shorted Securities
Investor A shorts stock S.
Without any news to justify it, investor B buys stock S, spiking the price for a few minutes, before selling it again, the price returning to the initial level.
During these ...
- 1
2
votes
3
answers
881
views
Shorting a company's stock after leaving
If a person just generally thinks a company is poorly run and decides to quit, would shorting the stock count as trading on non-public material information? If it's not based on any specific piece of ...
- 29
1
vote
1
answer
270
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What happens to First Republic Bank (FRC) Short Puts on acquisition by JP Morgan?
I own 5 Short Puts with strike price @ 11.00 with expiry being 19th May 2023. Since trading is halted, I may not be able to execute or close the position. What will happen to this position once JP ...
1
vote
2
answers
180
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Short selling options, can brokerage force seller to buy back the options
In case if I short sell ETF or stocks, brokerage can ask short seller to cover the position even if the user is paying interest and is within margin limit.
With this question, I want to know in case ...
- 1,026
1
vote
1
answer
118
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Shorting stock vs buying stock on margin which fee is higher?
I know when you buy stock on margin you need to pay a interest rate for example with IB a rate + benchmark rate. How expensive is shorting a stock long term, is it a similar fee as buying on margin e....
- 2,041
1
vote
3
answers
186
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"Shorting" a currency
I would like to bet against a currency, I have USD. for example: how can I bet against the EUR?
Unfortunately when I try to SELL (short) EUR with my broker - I am not allowed to. Are there other ways ...
1
vote
1
answer
92
views
Margin call and shorting, depends on cash or both cash and held security?
When you short a stock if the value of the stock goes above a threshold you will get a margin call. Is this threshold dependent on the total value of your held stock + cash or just available cash? I'...
- 2,041
2
votes
2
answers
180
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Why are ETFs less prone to a short squeeze?
I'm a novice to investing and I came across this Investopedia article which says:
However, short selling through ETFs is preferable to shorting individual stocks because of the lower risk of a short ...
- 713
0
votes
1
answer
103
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Superinvestors are long or short on their positions
When I am watching Dataroma or TIKR, how can I say if a stock held by a superinvestor is short or long? It says how many shares they owned but not if it is short or long.
- 113
3
votes
2
answers
128
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How would a short sale really be handled by a brokerage in a practical sense under certain conditions (see details)?
I understand what a short sale is, and I understand the risks, especially if you do it on margin. I also understand what your broker (brokerage account) might do pre-emptively if they anticipate your ...
-3
votes
1
answer
92
views
How much can a billionaire borrow to short sell? [closed]
Suppose I am a billionaire worth $10B. I have a good reputation and my assets are mostly stock in a big established company.
Now say I want to short a large company like Tesla or Facebook. I want to ...
- 11
2
votes
1
answer
109
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How option writers influence share price
How do the option writers influence share price? I have heard about short covering but it happens only in FNO how can it help the stock price to up since the shorts are built in FNO and its derived ...
- 21
1
vote
0
answers
112
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Will SQQQ go back to 2018 level if QQQ will?
It's a theoretical question, but i am not able to figure it out. Is the relation between SQQQ and QQQ close enough to expect SQQQ go back to where it was at certain point in time, if QQQ goes back to ...
- 111
2
votes
2
answers
194
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will my brokerage account receive some stocks after someone exercises put options that I wrote?
I have some basic knowledge of how options operate. I have limited practical experience buying calls, and puts. I never tried shorting options, and before doing so, wanted to clarify some basic ...
- 177
2
votes
0
answers
100
views
Short interest and short volume does not add up
I know the difference between short volume and short interest. The later the number of the outstanding shares that are now (or any other date) in a short position; while the former shows how many ...
- 121
2
votes
0
answers
33
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How to calculate profits from a short position [duplicate]
Say I have a $100 balance, the margin requirement is 10%, I short a stock at $100, and the stock drops down to $10, is my profit 90% or 1000%? To more more specific, is the profit 90% relative to my ...
- 121
2
votes
2
answers
5k
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How does "selling" a credit default swap works in the Big Short?
I have watched The Big Short several times, watched a bunch of clips, and searched in youtube lots of explanatory videos. I am not even close to understand all the concepts shown in the movie, but I ...
- 21
0
votes
5
answers
230
views
How to use short selling to safeguard or protect an investment?
I came across the following question:
Kumar has 100 shares of ABC Co. which he bought at $ 50. The current market price is
$ 140. Illustrate how Kumar using short selling can safeguard or protect his ...
- 111
1
vote
1
answer
51
views
shorting stock when you have no cash left in brockerage
Is there any difference when shorting stock under the following 2 brokerage accounts?
$0 cash $50k in stocks
$50k cash $0 in stocks
Would you have to pay margin like longing a stock in scenario 1 ...
- 2,041
1
vote
1
answer
109
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Level 2 question: orders filled at best offer price not moving the the size of best offer
Suppose I have a best offer on Level 2: 200 shares at $2. If I place a bid for 100 shares at $2, I would expect level 2 to show the best offer to be 100 shares at $2 after my order is filled. But I ...
- 111
1
vote
0
answers
42
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Can I set a ceiling for above which I don't want to execute a short trade
I am wondering how I can achieve the following trading order (all in one). Say that at closing yesterday a stock traded at $10. Now late at night (or early morning) outside of trading hours, I want to ...
- 11
1
vote
1
answer
644
views
When is cash available to be withdrawn from Fidelity after selling stocks?
When is cash available to be withdrawn from Fidelity after selling ETFs and stocks?
5
votes
2
answers
1k
views
Does the wash sale rule apply in reverse?
What if I sold an asset that will result in a profit, instead of a loss, but then buy it back within 30 days. Will this profit be taxable?
15
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3
answers
4k
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Would I be able to avoid the wash sale rule if I buy back the security on January 1st after selling it on December 31st?
It would definitely be within 30 days, but it would be of next year.
So would this successfully by pass the wash sale rule?
2
votes
1
answer
171
views
Does shorting stock cause your account value to go up?
Does shorting stock cause your account value number to go up?
Specifically for IB but most broker have a number that shows the total value of your account
Stocks + cash + any other investment.
- 2,041
1
vote
2
answers
107
views
Understanding mortgage backed securities
The investment banks called these bundles "mortgage back securities or MBS". and they sold these MBS's as bonds and stocks to anyone who wanted to invest in them.
Source
I don't get it, how ...
- 113
2
votes
1
answer
153
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Hedging a portfolio by shorting index - Margin calculations
I wish to run a long-only portfolio of stocks and hedge it during turbulent times by shorting a correlated index.
I'd rather short an index ETF for hedging instead of flattening my position. My ...
- 119
9
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2
answers
2k
views
Why is "Short interest" not the interest of short to pay, but the volume of short shares?
English is not my native language and I'm so confused to this term Short interest.
Why is it not the interest that you need to pay (when you borrow stocks from others), but the volume?
- 2,527
0
votes
1
answer
354
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How to calculate a trailing stop loss for a gamma squeeze?
I'm pretty sure AMC is going to hit crazy prices in a couple of weeks to months. A Korean AI traded fund just dumped Facebook and Wallmart for AMC. Plus, I got in a pretty big fight with some ...
- 107
2
votes
2
answers
228
views
What's the incentive for a broker to allow short selling?
I was researching how short selling worked and I was wondering what are the advantages for the broker to allow this. Why would the broker lend out stocks with the expectation that they will get it ...
- 71
4
votes
3
answers
285
views
Does selling more options than there is stock to cover create selling pressure?
I read this exchange and the borrowing a car, creating an IOU and selling it made sense. However, can you take the scenario a step further and help fill in more details?
On Monday:
Car owner A has a ...
- 43
3
votes
0
answers
83
views
Who sets the stock loan costs in U.S. markets?
The market "fee rate" (a.k.a. borrow cost ) for borrowing stock shares to sell short can run very high. (One source for the current borrow cost is a list published every 15 minutes by ...
- 222
1
vote
2
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549
views
Calculating % profit on my investment of a short sale based on % loss of the stock price
Basically, when a stock price goes down by 50%, my profit is 100% of my sell price. When a stock goes down by 75%, my profit is 300% of my sell price.
I'm curious what the relationship is between the ...
- 13
1
vote
2
answers
163
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Is It easy to buy back a put-option on its expiry date?
Say I sold a BABA put expiring 5/24 .
The usual advise is to close at 50% profit.
What If I leave my position open until the expiry date. The put option will be expiring with no value for the other ...
- 115
1
vote
1
answer
96
views
Will I receive an RT call or am I safe?
I just opened a position on WeBull to short a stock with a market value of $1,554. The total amount of cash in my account is $5200, but my day trading and overnight buying power is saying 0 after I ...
- 11
3
votes
1
answer
166
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Why short (German) government bond futures?
Today, mainly out of curiosity, I went to a major ETF comparison website and sorted the short ETFs by market value. I was surprised when among the first few places in the list I found an ETF (LYX0FW) ...
- 834
0
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0
answers
32
views
How prices in stock market changes in accordance with demand and supply [duplicate]
Let's assume there is a listed company x. Currently it has 100 shares issued to trade in free float market. Current price of stock is let say 10. Now please let me know if I purchase one share of ...
- 11
16
votes
3
answers
8k
views
If I short cryptocurrencies, why don't I get the money immediately?
The academic definition of shorting is to borrow someone else's asset such as stocks, sell it now and repay it later. So I assume that when I short the stocks, money is credited to my account from a ...
- 325
3
votes
2
answers
1k
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Is there something like a covered call for futures?
I am making my first baby steps in learning about future contracts.
In the option market there is something like a covered call, where one can limit the upside risk to the loss of the shares one ...
- 135
1
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0
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801
views
What happens when a market-maker goes bankrupt during / as a result of an over-extended unsupported position?
The meme stocks have me thinking about the exchange backend. What happens when a market-maker / money-maker has an extreme position in a stock that is now unsupported by shares, just derivatives and ...
2
votes
0
answers
244
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Does Canada have regulations regarding "shorting against the box"?
If you hold a long position in a stock and believe it will go down but don't want to realize any gains, you can a open short position in that same stock to hedge against any drops in the price. This ...
- 174