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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How is it possible to have a short interest greater than 100%? [duplicate]
Currently when you look at NYSE: GME (GameStop Corp.), according to MarketWatch the company has a short interest of 136.56% since 09/15/20.
How exactly is this possible? Is this just a faulty data ...
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Negative Sell Trades — what do I need to do now?
I'm new to trading. I'm trading crude oil CFDs. I'm holding a short position of 400 barrels of crude oil at $37.50, but the price of crude oil is now $41.50.
During the move from $37.50 to $41.50, my ...
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Why can't I directly short the bond market like I can with the stock market?
I am talking about directly shorting bonds (i.e. excluding derivative instruments like CDS).
Why can I often short stocks and ETFs but not bonds? Is there something fundamentally different?
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Why does short-selling treasuries require significant collateral?
In the vein of this question, I'm curious about getting a loan by selling treasuries. The issue, apparently, is that the proceeds of the short sale is held as collateral.
As I understand it, however, ...
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Shorting Stocks
Could someone please instruct me as to why, through TD Ameritrade/Thinkorswim I am not allowed to short PLAY Stock (Dave and Busters)?
Could someone please educate this individual. I am really wanting ...
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How does voting work when shares are lent out to short sellers?
At a stock brokerage firm, A has 1000 shares of a stock in a margin account, while B has 500 shares. The stock brokerage firm holds all these shares in street name and can lend these shares to short ...
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Is put option a good alternative to shorting HTB shares
A lot of companies I'm interested in shorting have hard to borrow shares (HTB) I often miss the trade because I can't borrow the shares to short.
I don't know much about option trading but I know that ...
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How do I replicate a shorted stock and protective call option using options only?
Suppose a stock is currently at $100. I construct the following portfolio:
Short-sell 100 shares at $100
Long a call option — strike price: $105 (protective call)
The protective call option serves ...
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How does stock split work in practice with short sellers?
Using Tesla as an example who announced a coming 5-1 stock split yesterday
According to the press release, people that own Tesla stocks on or before Aug 21st will receive an additional 4 shares as ...
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Can closing a short position trigger a wash sale?
I have a bit of a weird situation, and am not 100% sure how the wash sale rules should apply (in the U.S.)
Lets say I have 100 shares of a mutual fund that I purchased over a year ago for $10 each, ...
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Can I use the money I obtained from shorting a stock? [duplicate]
If I were to short a stock currently valued at $100, I understand that $100 would be placed into my margin account. Can I use that $100 to purchase stocks?
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Do I earn interest when shorting stocks?
Suppose I short 100 shares of a $5 stock. My cash balance will be +$500 due to the short position. Does this $500 earn any interest?
I have heard two opposing answers:
The $500 earns interest, and I ...
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What are the risks of allowing my stock broker to lend out my shares to short sellers?
Some types of brokerage accounts allow the stock broker to lend my shares to short sellers (probably without needing to notify me). Do I incur any risks when I sign up for such accounts? Is there any ...
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What happens when I want to sell my shares that are currently lent to a short seller?
Suppose I own 100 shares of a company in a margin account. Suppose the brokerage firm lends my shares to a short seller. Questions:
Can I sell my 100 shares while they are still on loan to the short ...
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A few questions about stock investing
(1) What happens if I buy a stock before it splits? For example,
I buy 100 shares of A at $10 dollars per share a day before a 2:1 split. With T+2, delivery will be after the stock split. Does the ...
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Can a single share of stock be shorted multiple times?
Is it possible for a single share of stock to be shorted multiple times?
Concrete example:
Imagine we have five people with the following motivations:
Person A owns a share of company ABC and wants to ...
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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 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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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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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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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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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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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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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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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 ...
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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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 ...
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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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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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