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Questions tagged [shorting-securities]

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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28 views

Merger/Acquisition on short and long symbols [duplicate]

I have a general understanding of how mergers and acquisitions work for symbols being traded in long positions. However, I am confused about how these events are calculated when shorts positions are ...
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2answers
96 views

price up under selling pressure

Why does share price go up in spite of tremendous selling pressure? I shorted one share after seeing one share where selling was three times more than buying but it went up.
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0answers
55 views

Are short sellers responsible for damages in a securities class action suit?

Imagine that XYZ company was found liable for its misdeeds and its shareholders are awarded a compensation. Are the short sellers on the hook as well? That is, do they need to pay the amount of the ...
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3answers
114 views

Can shorting stocks from holdings make money?

Let's say I hold 5 shares of AAPL. I'm guessing that the stock price will fall with respect to the open price. So I sell at open and then it falls 10%. Then I buy it back which should give me the ...
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2answers
50 views

Explanation of stop loss of sell stop limit order to stop loss

Question What is the meaning of Stop Loss of the bracket in the Sell Stop Limit order on the current position? Background Having the position with the current price 59.80, thinking to place a sell ...
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1answer
27 views

Closing short position

Question In the situation below, I suppose there will be another order required to cancel the short position (bottom left), in addition to the order to buy back shared when the price moved in favour, ...
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3answers
173 views

Do I have to pay interest on a margin short sale if I post full cash collateral?

Let's say that I have $100 in my account and I want to short sell stock A. Stock A is valued at $100, so therefore I sell one share of stock A. In order to do this, the account is a margin account. ...
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2answers
33 views

Short-Ratio, Short-Squeeze and Bullish Market

I am reading on various topics (as some may have gathered from posts). I understand the concept and implications of a short-sale pretty well. I understand how to interpret the short-ratio. Everything ...
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1answer
50 views

What is the relationship between the short ratio, short interest record date, and short covering?

Assuming if company ABC settle short interest dated on September 8 (does it have to be mid or end of each month for every company to settle short interests or it is only when they have to report?), ...
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4answers
773 views

Does short-selling hurt companies' stock price in the long-term?

Today, I've read a Bloomberg article on latest Musk tweet tantrums, where he, among other things, mentioned this: Short-sellers are value destroyers. Should definitely be illegal. Is that ...
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2answers
76 views

does naked call option assignment result in stock borrowing fees?

If I write a naked call option which gets exercised early, will I have a chance to purchase the stock to cover the call or will I already owe a stock borrow fee by the time I am notified of the ...
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1answer
144 views

Selling short during short circuit breaker

Imagine a stock went down more than 10% intraday, triggering the short circuit breaker, aka Alternative uptick rule. Short selling is only possible higher than the best bid. But what happens exactly? ...
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1answer
76 views

How does selling a stock short affect my cash and margin positions in my account?

Example of my etrade account: I have $3k cash and $0 margin debt and my account net balance shows $50k. I then sell to open a $4k position in XYZ how does this impact the cash, margin and net balance?...
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3answers
429 views

Vegan hedge (shorting non-vegan, long vegan)

Edited in response to comments. How could I isolate a bet on veganism? (Assume that most of my wealth is already invested passively in diversified index funds and that for alpha with a different ...
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1answer
80 views

short selling time frames?

My understanding of short selling is... let's say you sell stock for $50 a share. If you purchase the stock for delivery two days later for $40 and then ship it you've effectively realized a profit ...
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3answers
205 views

Does short selling create additional share in the market?

Let's say that I short-sell 1 share that A lent to me and B immediately bought from me. Doesn't this create additional share in the market because A will see it as "lent out" in his bank account and ...
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3answers
382 views

What happens to a short seller, who wants to close his position, but there are no shares available for sale?

For the sake of argument, let's assume a scenario, where the company is very illiquid, and there are no shares for sale and even increasing the buy order doesn't produce sellers. What happens to the ...
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1answer
207 views

I don't understand what it means to “Sell” stock that you don't already own, can someone explain the intuition behind it? [duplicate]

I started a couple months ago to learn more about the stock market and financial education in general, but this particular concept was hard to wrap my head around. I understand there are bears and ...
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2answers
4k views

Shorting a stock after dividend

Theoretically, the price of a stock should always fall whenever a dividend is paid out to shareholders. Is this true in practice? If it is, I can just short the stock before the dividend is paid and ...
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2answers
85 views

Covering my short sale

Will anything happen if I don't cover my short? Is there a time limit for when the bank forces me to cover it? Will they close my account if I don't cover? Thanks
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1answer
1k views

Can I short a stock for a long amount of time?

The next recession is inevitable, if what I read is to be believed. Whether it happens tomorrow, or in 10 years, it's coming. Why shouldn't I short many stocks, and hold on to them for whatever ...
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4answers
80 views

Call vs Puts: a short position can profit using both depending on strike price?

I'm confused about whether you want to own a call or put if you believe a stock price will go down. Most articles have described owning Puts as betting the stock will go down, and calls as betting ...
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3answers
4k views

Why do speculators short-sell a stock when they wish to go short, rather than purchase put options?

I'm still trying to figure out, why, if a speculator believes a security will go down in value they use the tradition route of short-selling, when it would seem that purchasing put options is the less ...
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1answer
81 views

Why did SPVXSPIT drop 95% in February?

In February 2018, SPVXSPIT (S&P 500 VIX Short Term Futures Inverse Daily Index) seems to have dropped about 95%, but after much googling, there does not seem to be any discussion about this. The ...
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2answers
447 views

Profiting from an economic bubble collapse

An article in Business Insider argues that, despite the numbers, the US economy is fundamentally unhealthy. The current unprecedented corporate profits are essentially being subsidized by low quality ...
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1answer
177 views

Predicting a short squeeze

I have been following Tesla (TSLA) and I think there may be a short squeeze occurring. I was wondering if there are any tell tale signs, for when a short squeeze is occurring?
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1answer
159 views

Is possible to short sell stocks without using CFD?

the title is all my question :) Is possible to short sell stocks without using CFD?
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4answers
792 views

Sellers won't sell back shares in a short sale?

I'm trying to understand the concept of short selling shares in a bear market. Here's what I understand so far. Person A owns 100 shares Person B borrows 100 shares from Person A without Person A's ...
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1answer
61 views

Fine-tuning index fund positions

In general, passive mutual funds (as well as ETFs) provide a good way to diversify without keeping track of and/or a large number of separate securities or paying high additional expenses. However, ...
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1answer
128 views

What is the issue with naked shorts?

As I understand it, in the USA it is illegal to short (sell) an underlying asset without a counter-party that lends the asset (naked) for the sale. From the trader's perspective, why does it matter if ...
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4answers
9k views

How to profit off a stock price falling

How would one profit from a share price falling, granted that they correctly predicted it would happen? Say I had a hunch that a certain stock was going to fall next week, how could I effectively ...
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4answers
2k views

Why do people rarely execute options?

Options have recently sparked my curiosity as you can short a stock with a put option and only risk your premium (as opposed to shorting in a margin account) but I still have a few questions. Why do ...
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3answers
180 views

By pass the 100% limit in shorting: Capitalising on a Market Crash

I want to short a cryptocurrency that is highly overvalued. Let say its current value as of now is $10,000 , my intuition say that sometime next year like Feb its going to fall significantly to about $...
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2answers
122 views

How can a retail investor short the German car industry and its suppliers?

Suppose that I want to make a small investment of around 1000€ and that I want to short the German car industry and its suppliers over the long term (5-15 years). How would you do this?
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0answers
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Can a buyout announcement cause a short squeeze above the announced takeover price?

Consider a company with heavily shorted stock. If that company puts itself up for sale and a friendly (shareholder approved) acquisition happens, can it result in a short squeeze driving the price of ...
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2answers
139 views

What is the long side of a short transaction called?

The way that a short sale occurs is that a person called the short seller borrows the item to be shorted from someone else and then sells it. The debt is for the item itself, so as long as it is ...
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1answer
55 views

What's wrong with this margin calculation?

I'm calculating margin on put selling options using TDAmeritrade's formula. It can be found here on p.11: https://www.tdameritrade.com/retail-en_us/resources/pdf/AMTD086.pdf Using the first example ...
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1answer
113 views

Simultaneous long/short India

I know its not legal to have open long and short position on specific security (on two stock exchanges - NSE/BSE), but where exactly is this restriction defined (SEBI regulation? where can I find it?) ...
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1answer
217 views

What price side am I paying when shorting stock / future

I know that question was asked here numerous times but I don't think it was ever answered clearly. When I'm short selling a security (stock/future...) I pay a bid price (with a MKT order - when I ...
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1answer
234 views

Why can't I open multiple sell orders?

I have bought few EARS shares in Jan (300) and May(500). I am still learning stock market basics. But now, I can not sell 500 shares in profit. Whenever I tried to make trade on Fidelity; I am ...
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1answer
132 views

What causes the asymmetry between being long and short in a stock?

What causes the asymmetry between being long and short in a stock? If I go long (no leverage) on a stock that rises from $1 to $1000 I can turn $1000 into $1,000,000, a 99,900% profit If I go short (...
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2answers
4k views

How do stops and limits work with short-selling?

My understanding of stock market orders right now is illustrated as shown: stock market orders However, if the price of a stock was trading at 22.00 and I wanted to enter a short position at a ...
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2answers
269 views

Short selling - lender's motivation

It is not clear to me how the lender of the shares profits at all from short selling. The broker profits by lending the shares to someone else and then getting paid interest The short seller profits ...
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2answers
2k views

Is the money you get from shorting a stock free to use for going long on other stocks?

I shorted a particular stock which resulted in $10,000 being deposited into my Interactive Brokers account. I then put all of that $10,000 into VTI (total stock market index). Basically making the bet ...
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2answers
689 views

How can one go short in Uber?

I believe Uber is massively overvalued and it will face down rounds in the near future. Assuming I can use all financial instruments, how could I short Uber?
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1answer
160 views

understanding the process/payment of short sale dividends

Reference the log/journal entries below... I'm trying to follow the accounting trail for the following scenario. 10/04/16  20:36 Sold 5 SPY 12/30/16 220 Call @2.52 $1,255.41 12/16/16  03:17 OPT ...
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1answer
383 views

How do I short government bonds?

Perhaps it's because I've just watched The Big Short, but I'm bearish on Italian Government bonds right now. How would I go about shorting government bonds?
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2answers
116 views

Differences between hedge funds and short selling

Both hedge funds and short take advantage from bearish markets, but what is the difference between them?
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1answer
1k views

Are spot market ,regular market and ready market same in stock trading if not then what is the difference?

Are spot market ,regular market and ready market same in stock trading if not then what is the difference ? and is short selling margin trading ?
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2answers
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Is this legal: going long on call options and artificially increasing the price of the underlying asset seconds before expiration?

Let's say I bought a particular call option and own the majority of it. On the very last second (before the expiry date, seconds before the market closes), if I bought every single offer in the ...