Questions tagged [shorting-securities]

Short selling of stock involves borrowing shares that one doesn't own with the intention of repurchasing them at a lower price. Short selling of an option involves selling an option without having an equivalent position in the underlying security.

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0answers
24 views

What happens to cost of carry when a commodity is short-sold?

Say investor B has a gold bar, and must pay 1 dollar per day to store it. Investor A shorts gold, borrowing the gold bar from B, and selling it to investor C. What I want to know is, what happens to ...
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976 views

What does “short positions exceed float” mean?

From the 2/18 GameStop hearing: Rep. Andy Barr: (02:01:32) [...] But Melvin lost $6 billion in 20 trading days. Let me ask you about your risk management. Did your short positions exceed float? What ...
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Who earns the interest during a naked short sell, where the shares haven't been located yet and fails to deliver

When someone naked short sells, who do they pay the interest to? If they never locate the shares, then there isn't a shareholder to pay. Do they pretend to pay interest? Do they actually pay interest? ...
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Options trading: buy/sell to open/close terminology

I want to buy put options as I believe the price of the underlying asset is going down. In the linked video here at around 1:10 there is a bit saying that for short positions, you 'sell to open' to ...
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1answer
34 views

Effect of short selling the stock on the buying power and cash position

Hypothetical situation: If I have 25000$ cash in my account and the margin offered by broker is 50%. So, the cash I can use is $25000, my margin amount is $50,000 and my buying power is $75000. I ...
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1answer
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I know it's possible to have >100% of shares held via shorts, but how can institutions hold more than 200% of shares?

I understand, mostly, when a share of stock undergoes a short trade exchange that both the lender and lendee can in effect claim ownership. If this was done for every share of the stock, I would ...
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2answers
24 views

Percentage calculation of a short position

I am getting confused when calculating the percentage profit (or loss) of a short position and I don't know which version is the right one: version 1: // I enter a short position with entry price 8 ...
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2answers
184 views

What is the difference between margin trading and short selling?

In margin trading, you borrow money from a broker to purchase securities. In short selling, you borrow securities to sell them. Still, in both cases, you are borrowing from the broker. Is the only ...
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4answers
5k views

Why would collateral be required to make a stock purchase?

I've been reading this page on the recent GameStop short squeeeze. It mentions that at one point Robinhood and other brokers prevented their clients from purchasing shares of GameStop (GME): On ...
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1answer
70 views

For an individual brokerage account user, what is the cheapest way to take a short position in a stock?

As far as I know, if I want to sell short, say, $100 worth of stock I need to post $150 in cash collateral and pay some fees each day. Another way is to buy a put option. In that case, I need to pay ...
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1answer
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Buying To Cover And Protecting Profits from Short Sell

I sold covered call options, and I would like to buy to cover when the market opens on Monday. For this particular instrument, trading volume is a bit thin, and I would like to "hide" my ...
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Does the stock price rise when short-sellers buy back the shares they need?

This question is mainly based on GME (though applies to any short example) and whether there’s logic in retail investors holding their long position. Is there logic in this thinking: “I’m going to ...
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Does exercising an option move the price?

This is a follow up question to this one. Summary: There are deep in-the-money puts at strikes of $800 being traded for an instrument whose price is much below that (in the ballpark of $225 at the ...
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1answer
37 views

How does short interest influence the borrow rate when shares can be relended ad infinitum?

According to, (https://www.investopedia.com/terms/s/stock-loan-fee.asp) , as more shares are shorted, the total supply of lendable shares is decreased since fewer shares are available to borrow. But ...
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123 views

What are the consequences of heavily regulating shorting? [closed]

The GME short squeeze was very interesting for me as a newbie trader because it had unexpected effects despite not holding that position: some platforms forbid their user to buy some stocks or ...
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Are counterfeit shares and the “short ladder attacks” purporting to use them, real?

Are counterfeit shares and the "short ladder attacks" purporting to use them, real? Hi, long-time SE user here. As I would like to attract users with actual industry experience or expertise, ...
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GameStop Short Squeeze - a moral component? [closed]

From the headline coverage, the options trading is made out to be a Main Street vs Wall Street phenomenon: or even sensationalized to average Joe vs banksters. But it seems that the hedge fund keeps a ...
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1answer
273 views

Did GME short sellers unwind by buying back shares, or in some other way?

A few weeks ago, short interest in GameStop (GME) was around 140%. Float is around 47 million, so total tradeable shares would have been about 113 million. According to reporting I have seen, it has ...
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1answer
92 views

Why does short ratio use “average daily trading volume”?

I understand what short interest is (% of shares borrowed but not covered yet). My understanding is that once a share is borrowed, it can't be borrowed again (legally, anyway). This would lead me to ...
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5k views

Deep in the money put options

I'm trying to make sense of this option: Type: put Expiry: 2021-02-05 (= this week's Friday) Bid: 580.4 Ask: 584.9 Contract size: 100 Strike: 800 The underlying's last price is $225. Buying this put ...
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GME counterfeit shares?

There's an article which claims that short sellers + brokers + DTCC sometimes manufactures counterfeit shares through legal and less-than-legal means to attack vulnerable companies and profit from ...
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1answer
281 views

How come shares of GME or AMC are not available to borrow for short selling during a short squeeze?

The principle of a short squeeze is that it makes it difficult to buy stock, so that people who want to cover their shorts have to pay a premium and make the price go higher. Conversely, that should ...
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5answers
7k views

Why can't GameStop split their stocks?

I'm trying to understand the short-squeeze situation happening with GameStop. From what I understand, the basic idea is that as people continue buying up the available stocks, the short sellers are ...
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1answer
125 views

What happens if somebody is not able to give back the stocks they borrowed for a short position? [closed]

I have heard very little about the things going on with various short positions and Redditors buying and holding stocks. But I heard that at one point the last transaction price for a stock was $300 ...
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Why aren't there automated systems already in place to recognize potential short squeezes and capitalise on them?

The whole Gamestop debacle has proved how profitable short squeezes can be. It essentially allows you to pressure large hedge funds who shorted too hard. So I was wondering, why aren't there already ...
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1answer
182 views

How can you short more shares than what is available? [duplicate]

I'm trying to wrap my head around the recent events of NYSE:GME, that quote the short interest to be 140.3%. I have not been able to find any satisfactory explanation as to how this is possible or ...
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1answer
415 views

What are the possible outcomes of GME situation assuming that GME investors hold their positions indefinitely?

I am a newbie investor and the GME situation is very interesting for me. I have read many articles about it and could not find an answer to a simple question: What happens if investors simply hold GME ...
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Dividend impact on accumulating inverse ETFs

This is a pretty straightforward clarification question. For inverse ETFs tracking an index which are tagged as "accumulating", what this actually means is that we are not tracking the ...
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2answers
254 views

Where did the money go in the recent GME short squeeze?

Recently the GME stock moved in an extreme way, though there is more to it, these steps appear to have happened: A hedge fund had a large short position Many retail investors bought the stock, ...
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2answers
82 views

How can I look up a public company's short-stock position? [duplicate]

I understand what has brought so much attention to GameStop's stock is someone noticed that it has strong finances but was being heavily shorted, i.e., other people took heavy bets that the stock ...
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1answer
140 views

What happens if a short position can't be covered?

This question does a nice job of answering what it takes for short position to exist in the first place, how that can result in "owning" >100% of a company and what happens when shorters ...
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What is the actual reason the short sellers of GME can't just hold their positions until the price goes back to normal?

Thinking about the current situation where GME has been shorted by more than the existing float, I think I have a basic understanding of short selling as selling shares you've borrowed. I've seen a ...
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What would happen to short positions if one entity owns All the share and isn't selling? [duplicate]

Edit: The question this was closed as a "duplicate" of while related and interesting, does not ask or answer the question I'm asking. What it asks is what happens with regards to things like ...
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2answers
331 views

Why can’t I short Game Stop right now?

I attempted to put in a small short sell order for GME (since I believe the price is currently way overvalued at >$300), but it said the order could not be performed because there are no available ...
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3answers
804 views

What are the implications for GameStop as a company in the aftermath of the current share price surge?

The way that the current short-squeeze of GameStop stock works has been well covered elsewhere and the position of the two investment sides has also been quite clearly documented, but what impact is ...
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How to know if a stock is being held short

Redditors successfully attack hedge funds because they know that GME is being held short by them. But how do they know this? Where do they get this information? According to older posts, you can check ...
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6answers
5k views

How does the WallStreetBets community benefit from buying poorly performing stocks?

According to Allison Morrow, Everything you need to know about how a Reddit group blew up GameStop's stock, CNN Business, January 28, 2021. the subreddit r/wallstreetbets is buying, en masse, stocks ...
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Unable to close a short sell position in Fidelity even after buying the the stock

I performed a SHORT SELL for MRNA stock sometime back and then performed a BUY to cover the SHORT. Even after many days of buying the stock I still see the SHORT position in my Fidelity portfolio. I ...
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How do I know if a Fund engages in Short Selling

Almost all my investments are done through funds in my pension and the extent of my research into them is through the Fund fact sheets similar to the these. How can I tell if I'm investing in short ...
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Understanding Share statistics: Yahoo-finance

I am looking at share statistics of Virgin Galactic Holdings, Inc. (SPCE) taken ~10 minutes ago. Shares Outstanding 234.34M Float ...
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6answers
25k views

Can someone explain the GME short squeeze situation to a non-stock trader?

GameStop Corp. (GME) stock is over $300 at the time of this post. I understand the 10,000 foot view of the story only: That some Reddit folks are buying up shares to squeeze a short seller. But I don'...
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2answers
63 views

Can shares for sale be shorted? [closed]

If I put my shares up for sale at a limit price (and good till cancelled), can they be shorted while my order is open?
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1answer
113 views

What if there are more short positions than people willing to sell?

Let's imagine (purely hypothetical) that a hedge fund has shorted 100% or close to 100% of existing shares and has to cover them by Friday. What happens on that Friday when the hedge fund has to cover?...
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1answer
116 views

Short squeeze of long term stock holding

Does 50 % of the float being short indicate a short squeeze ? The stock also went up 25% today at the maximum , normally it is an inactive dividend play which is what I wanted. I put in a short at 10% ...
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1answer
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2 questions about puts/calls/shorting

I have 2 questions about puts/calls + shorting in my learning about options. I'm confused about how "short selling" a stock is the same/different as "writing a covered call." In ...
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5answers
248 views

If options gives you the RIGHT but not the OBLIGATION to exercise them, then why are they being forcefully exercised if they expired in the money?

Now, I know what you're thinking. If it's in the money, isn't it good that your broker automatically exercise the options for you on expiration date? Well, yes and no. If you somehow managed to miss ...
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1answer
70 views

What happens when bear is not able to buy back the shares (to be more precise borrowed shares) he sold? [duplicate]

I came across the stock market jargons: Bull and Bear. A bit of research on bear helped me understand bear as the person who borrows shares/stocks with speculation that the price of the borrowed ...
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3answers
57 views

Sell XYZ short 20 stop 20.50

Can someone help dissect this order for me. What exactly is happening here? What do each of these pieces mean? There are 2 separate orders here, correct? First I sell the stock, then I buy it back? ...
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3answers
164 views

If I short a lot of shares, will it make the share price drop even further?

I am just a high school student and had some doubts. So the price of a share is determined by demand and supply, so suppose I short a lot of shares thus increasing the supply, it will make it look as ...
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1answer
95 views

Why doesn't the short selling restriction apply to Moderna (MRNA) stock today?

Moderna's closing price yesterday was $169.86. Today it dropped to $147.20 (-13.3%) but the short selling restriction rule didn't activate. Why? Today's SSR stocks

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