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.

Filter by
Sorted by
Tagged with
0 votes
0 answers
19 views

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 ...
showkey's user avatar
  • 433
5 votes
1 answer
103 views

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 ...
sterid's user avatar
  • 181
0 votes
2 answers
91 views

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, ...
APerson's user avatar
  • 69
-1 votes
1 answer
92 views

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 ...
Han Guo's user avatar
2 votes
3 answers
447 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 ...
Abe's user avatar
  • 29
1 vote
1 answer
252 views

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 ...
Vittesh Jhaveri's user avatar
1 vote
2 answers
128 views

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 ...
puzzled's user avatar
  • 1,016
1 vote
1 answer
93 views

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....
Lightsout's user avatar
  • 2,041
1 vote
3 answers
162 views

"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 ...
Super Richman's user avatar
1 vote
1 answer
91 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'...
Lightsout's user avatar
  • 2,041
2 votes
2 answers
156 views

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 ...
Linkin's user avatar
  • 713
0 votes
1 answer
100 views

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.
J.Doe's user avatar
  • 113
3 votes
2 answers
122 views

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 ...
Curious Novice's user avatar
-3 votes
1 answer
91 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 ...
Spacenumbat's user avatar
2 votes
1 answer
103 views

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 ...
Amit Saurabh's user avatar
1 vote
0 answers
78 views

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 ...
TQQQ's user avatar
  • 111
2 votes
2 answers
157 views

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 ...
govordovsky's user avatar
2 votes
0 answers
67 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 ...
discipulus's user avatar
2 votes
0 answers
31 views

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 ...
blahahaaahahaa's user avatar
2 votes
2 answers
3k views

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 ...
Simon's user avatar
  • 21
0 votes
5 answers
165 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 ...
S. Tiss's user avatar
  • 11
1 vote
1 answer
48 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 ...
Lightsout's user avatar
  • 2,041
1 vote
1 answer
91 views

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 ...
user231536's user avatar
1 vote
0 answers
42 views

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 ...
Retset's user avatar
  • 11
1 vote
1 answer
405 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?
Bear Bile Farming is Torture's user avatar
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?
Bear Bile Farming is Torture's user avatar
15 votes
3 answers
4k views

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?
Bear Bile Farming is Torture's user avatar
2 votes
1 answer
164 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.
Lightsout's user avatar
  • 2,041
1 vote
2 answers
84 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 ...
tryst with freedom's user avatar
2 votes
1 answer
89 views

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 ...
maverik's user avatar
  • 119
9 votes
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?
AGamePlayer's user avatar
  • 2,527
0 votes
1 answer
311 views

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 ...
ZeroPhase's user avatar
  • 105
2 votes
2 answers
193 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 ...
user109855's user avatar
4 votes
3 answers
281 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 ...
TBT's user avatar
  • 43
3 votes
0 answers
72 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 ...
feetwet's user avatar
  • 222
1 vote
2 answers
274 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 ...
jwallis's user avatar
  • 13
1 vote
2 answers
106 views

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 ...
diamondx's user avatar
  • 115
1 vote
1 answer
79 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 ...
Jason Parker's user avatar
3 votes
1 answer
158 views

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) ...
B K's user avatar
  • 824
0 votes
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 ...
Jainav's user avatar
  • 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 ...
Eiffelbear's user avatar
3 votes
2 answers
862 views

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 ...
Juergen's user avatar
  • 135
1 vote
0 answers
667 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 ...
RetailInvestor's user avatar
2 votes
0 answers
212 views

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 ...
wispi's user avatar
  • 174
1 vote
0 answers
356 views

Is it bad for a stock to be on the Regulation SHO threshold list?

I have been reading up on Regulation SHO, and I have found some lists of stocks on the Regulation SHO "threshold list": SEC: Fails-to-Deliver Data, and OTC Markets: Reg SHO Data. However, I ...
Flux's user avatar
  • 17k
4 votes
1 answer
249 views

What is the formula for rebalancing a portfolio?

I have a portfolio of two assets. I've invested X% in asset A and Y% in asset B. Here, X and Y are weights. So, for example X = 50, Y = 50 would be a long equal-weighted portfolio, whereas X = 50, Y = ...
fewegw's user avatar
  • 101
-1 votes
2 answers
236 views

Can selling naked calls create counterfeit shares?

I understand that illegal naked shorting can lead to FTDs since same share can be loaned out and shorted multiple times. This can lead to a situation where >100% of a stock's float is shorted (Ref: ...
maverik's user avatar
  • 119
2 votes
0 answers
38 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 ...
Trevor Wierzbowski's user avatar
5 votes
3 answers
1k 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 ...
TJNI4fmgOSiB2yFX's user avatar
2 votes
0 answers
55 views

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? ...
CQM's user avatar
  • 20.2k

1
2 3 4 5 6