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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1answer
69 views

Why do inverse ETFs reset daily?

I looked at some of the popular inverse ETFs such as ProShares Short S&P 500 (SH), ProShares UltraShort S&P 500 (SDS), Direxion Daily S&P 500 Bear 3X Shares (SPXS), ProShares Short Dow 30 (...
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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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39 views

Does short sale borrowing rate change during the term of the loan?

If I borrow shares to short, and the initial borrowing rate at the time that I open the position is 10%, will that be fixed until I close the position? i.e. if the borrowing rate increased to 20% ...
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475 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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660 views

It's possible to short a stock without paying interest?

Is it possible to short a stock or stock CFDs without paying any interest or swap fees for mantaining the position? Thank you.
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64 views

How to short Turkey? How to get exposure to local currency-denominated debt?

After some research, I decided to open a short position on Turkish Lira (TRY), and I'm also looking to short TRY-denominated debt. To short the TRY-denominated debt, I'd need to short-sell a TRY-...
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312 views

Choosing a strike price when you sell a short combo

Often different stocks that I want to short are not on my broker's "easy-to-borrow" list, so they are unavailable for shorting. A couple weeks ago I got serious about option trading and I found out ...
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36 views

initial margin calculation for multiple short positions

I've been trying to understand how margin requirements work for short positions (assume Reg-T US) to model for a backtesting software (I don't have direct experience with shorting, yet) I think I ...
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182 views

Covering during a short squeeze

During a short squeeze: Assuming that there was one group controlling most of the free trading shares, would it be possible for this controlling group to hold out and not sell any stock to drive ...
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34 views

Calculating relative performance of a short trade

This may seem incredibly simple, but I just can't get my head around it. Example: I make a short trade and the stock falls by 20%. During that period, the index falls by 10%. Have I made a +10% ...
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82 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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72 views

What happens to a short position when a company is nationalized?

The title speaks for itself. Would this be the same as shorting a company that goes bankrupt? So you basically get to keep all your money?
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72 views

limiting losses when shorting stock

First time shorting stock just want to make sure I limit my losses correctly. Say I short 100 shares of SPY and $272 and I want to get out(cover my short) if it goes above $285 would the following ...
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71 views

Who is your counterparty when longing / shorting on leverage?

I understand the basic cases of how longing/shorting works and how two parties with opposing price predictions can make a derivative contract to settle in cash when the price of an asset goes up or ...
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1answer
68 views

Can you always buy to cover?

If one short sells, is there always the ability to 'buy to cover' or can there be a situation where it's not allowed by the government due to some kind of emergency, I heard in 2008 financial crisis ...
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94 views

What happens if I short-sell a stock and the company declares a large cash dividend?

Suppose I have shorted a stock. Further suppose that the company now declares a large extraordinary dividend. Will I have to pay the large dividend? If I understand correctly, there will be no loss ...
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134 views

By what mechanism can I short a commodity without the use of futures of that commodity?

I live in the US and I work for a company that is heavily related to a particular commodity X. As such, when I began working for them, I signed a document stating that I would not purchase stock/ETFs/...
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Short selling banned in Italy for 3 months. Am I affected with my Short ETF investments?

I'm from Italy and I've "invested" in the following short ETF: BOOST FTSE MIB 3X SHORT DAILY ISIN: IE00B873CW36 Ticker: 3ITS.MI WisdomTree Info Sheet Used to be called Boost, now they're WisdomTree ...
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1answer
363 views

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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Why isn't “everyone” short VXX?

I'm going to attempt to keep this question short instead of providing some rambling, and very likely, wrong explanation of the question. As far as I can tell from my novice research the VXX note is ...
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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 traditional route of short-selling, when it would seem that purchasing put options is the ...
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2answers
529 views

Shorting the Shenzen or ChiNext Index [closed]

is there any possibility to short the Shenzhen or ChiNext Index as an individual Investor? It seems as there are no options but two ETFs, namely the CSOP SZSE CHINEXT ETF-HKD and the ChinaAMC SME-...
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60 views

Is it less risky to short a stock after it has been short squeezed?

I'm looking at TSLA and it has risen some 250% in the past 4 months on not much news and it seems a lot of it has been due to a short squeeze (as I understand). Since the stock has been artificially ...
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54 views

Is the convertible bond arbitrage strategy really riskless if share price rises a lot?

Convertible bond arbitrage is a position when one goes short the company's stock and long the company's convertible bond. I have found many articles on the Internet stating that this is a riskless ...
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185 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. What is the equivalent of ...
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221 views

Can I use my long position stocks as margin for my short sold stocks?

Let's say I am going to use short selling as a way of hedging. For example, I will buy $100 of GOOG stock and short sell $100 PNQI. Let's say my broker wants 200% margin on short sells (100% my own ...
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335 views

Shorting: What if you can't find lenders?

I understand the shorting means you borrow the shares and sell them first, and pay them back later. So this is two-step process and things can go wrong in each step. For example: What if you can't ...
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74 views

What is the effect of a short stock position on the value of an option?

I'm reading the book "Option Volatility and Pricing" by Natenberg and there is a paragraph I'm having trouble understanding. Chapter 7 (Risk Measurement 1), Page 98, Paragraph 2: The value of a ...
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99 views

Lack or abundance of shares available to short. What does it mean for share price in short term?

When there are no shares available to short, it seems to me that there is a big demand for shorting and the price should go down. Demand for selling is higher than demand for buying. Buyers can't ...
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86 views

Have leveraged short ETFs lost equity?

I would like to take some hands-off, leveraged short positions of the global market, or portions thereof. There a many leveraged short ETFs. On looking at them, unsurprisingly the value of them has ...
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2k views

What is a Rebate rate when short selling shares

Investopedia says: The amount paid by a stock lender to a borrower who has put up cash collateral to borrow a stock. The stock loan rebate comes from the reinvestment of the cash collateral by the ...
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516 views

Do most rookies make a fortune in a bear market by short selling and put options?

A friend warned me not to be over confident in my rookie years buying stocks. He said during a bull market, it is very easy for everyone to look like a winner. Can the reverse be said for rookies ...
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619 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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340 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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106 views

When I write an option, do I have to pay interest on it? And can I invest the proceeds?

I have two closely related questions about what happens when I write a naked option. My understanding of short-selling a stock is that as long as the short position is open, my brokerage will (or ...
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290 views

Daily trading: recovering price change as cash, what am I missing?

If I have a tool to predict daily direction of stock price change, is it possible to daily recover price change as cash? Say, my machine learning can tell me if tomorrow GOOG will close low or high, ...
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129 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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246 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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6k 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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244 views

How can you short a bond if you think it's going to default when it comes due?

For the first 29 years, a 30-year bond works more or less like any other security, and you can short it just like anything else. However, I'm interested in what happens if you want to short it at the ...
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Can capital gains from shorting a stock ever be taxed as “long term?”

Is there ever a situation where the capital appreciation from shorting a stock would be considered long term? My understanding is that the "holding period" for the stock is the length of time the ...
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415 views

Can a broker swindle money out of a client by short-selling stock in their name?

If a broker manages a client account, are they able to swindle money out of a client's account if they short sell stocks in that account? My mother had a friend who handled her Schwab account. He ...
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1k 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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68 views

Closing a short position on the ex-dividend date

I understand that if I close a short position on the ex-dividend date then I owe the lender the dividend. It is taken from my account. Where does the money the company pays for the dividend on those ...
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3k views

What's the fastest way to get Hard To Borrow (HTB) stocks?

Often I find stocks that are Hard To Borrow (HTB) and I want to short them. However, many times, I see that on Think or Swim, I can't since they're HTB. Is there an "easy" way to find HTB stocks ...
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2k views

What happens if a short can't be covered?

My understanding is that when you short a stock you borrow it from a broker and the broker in turn usually borrows it from one of their other customers. Now let's say the stock suddenly rockets in ...
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90 views

How does short margin works internally?

I understand the concept of being short, but I don't understand how it works, maybe is easy to explain with an example: 1) A has $1 in his account. 2) B has $1 in his account. 3) A wants to buy ...
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243 views

Why do heavily shorted stocks do well?

I was looking at some heavily shorted stock which are shorted by big, institutional investors who know what they are doing and saw that some of them went up in the last six months. If so many smart ...
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186 views

Index Backed Short

If I have $200,000 in an index fund that mirrors the S&P 500, then I own the equivalent of 4+ thousand dollars in multiple high capitalization stocks. If I think that one of those stocks I already ...
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127 views

Can ETF be short-squeezed?

Can ETFs be short-squeezed? I'm not familiar with how they work. For ETFs like SPY, it seems it buys and sells stocks in the portfolio. For ETFs like UVXY, it seems it has no real stocks. How does ...