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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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
136 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
382 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
249 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
143 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
6k 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
335 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
726 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
174 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
500 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
152 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
481 views

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 ...
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2answers
1k 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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1answer
150 views

What happens with the “long” buyer of a stock when somebody else's short fails (that is, unlimited loss bankrupts short seller)

I am a long buyer. That is, I buy and hold and essentially never let go (my profits come from dividends). What happens when I buy a stock on the market that turned out to be somebody else's short, ...
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6answers
1k views

Buying and selling the same stock

If I buy a stock for say $1 and that stock goes up to $2, can I sell my initial investment being $1 and then buy back into the same stock when it goes back down to $1 over and over only using my ...
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3answers
240 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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1answer
165 views

How would I prove my claim in a class action settlement on a “stock misconduct” case when I shorted the stock?

In order to participate in a net settlement fund, a claimant must have "purchased or otherwise acquired stock". If I shorted does the stock did I "purchase it or otherwise acquire it"?
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3answers
134 views

Shorting Stocks And Margin Account Minimum

As I understand in order to put in a short order, one must have at least 150% of the trade value in their trading account. For example, if I were to short 200 shares of a stock which is currently ...
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2answers
540 views

Schwab wants to charge me interest on the money I received for selling TSLA short

Has anyone ever heard of a company charging you interest on short position? Should I try and open an account somewhere else if I want to short TSLA? This will cost me about $13 a day. I was called ...
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2answers
493 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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9answers
6k views

Why do shareholders participate in shorting stocks?

When an investor wants to short a stock, they need to borrow shares from someone else. Why would a shareholder lend the investor the shares? When the investor gives them back, the stock would be down....
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3answers
7k views

Can I profit from anticipating a drop in value?

Suppose there is an investment, such as a stock, which I currently own no units of. I predict this investment will soon drop in value. I have no reason to predict that the investment will bounce back ...
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3answers
893 views

When short negative yielding bonds, who pays the coupon

Assuming the bond was actually issued with a negative coupon, if you are short (borrowing someone else's bond to sell the bond at a lower price / higher yield) Who pays the coupon? There are at ...
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9answers
3k views

Why does short selling require borrowing?

Taking a 'long' position when investing is simple - you buy something (e.g a stock) with the hope it will appreciate in value, meaning you can then sell it and make a profit. However, the reverse, ...
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1answer
513 views

When short selling a dividend stock, what is the earliest date to cover and break even

Let's assume the ex-dividend date is 5/5/2016. 1) What is the latest date that I can cover before I'm on the hook for the dividend to begin with? 2) If I'm already on the hook for the dividend, ...
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3answers
270 views

question about short selling stocks

I'm trying to wrap my head around short selling. Online the explanations i found talk about borrowing a stock from your broker, selling it at a high price then waiting for the stock to drop in price ...
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2answers
587 views

How does the person lending shares to the short selller protect themselves if the short sellers are correct?

I'm curious how the person lending shares protects themselves from the downside if the short sellers are correct. Are they actually loaning shares or is it like the banks, loaning out more money ...
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2answers
534 views

How is it possible to go short using both sell stop-loss and stop-limit?

I want to buy shares in a company with a stipulation that the shares should be sold at an upper limit and at a lower limit (below original buy price). I.e. A stop-loss sell order in conjunction with a ...
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1answer
63 views

Sale after accepting an exchange offer - is this a short sale?

Let's say I own a stock for which there is an exchnage offer going on and I decide to accept the offer. In line with the terms of the offer, I will have to deliver the shares in a couple of weeks time....
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2answers
2k views

How can I find out who the major short sellers are in a stock?

I'm interested in a stock that currently has a short interest of 40%. Which strikes me as huge, and unjustified in this case. Which, in turn, makes me wonder what I'm missing that all those short ...
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2answers
162 views

Hedging against an acquisition of a stock

Let's say I have done research and have a view that a public company's stock will go down due to worsening fundamentals. So normally then, one can express that view by shorting the stock. However, ...
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2answers
497 views

How does the spread on an orderbook affect shorting?

Say I wanted to short ABC Company because I believe the stock price will go down 7% or more. The ask price is $6 and the bid price is $5. Volume is 4-5 Million shares. I decide to short $2000 dollars ...
42
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6answers
15k views

Can a CEO short his own company?

I'm just curious, it seems a CEO could make a lot of money by shorting a huge amount of shares on his company through a third party and then purposefully tanking the company before being fired. Surely ...
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1answer
1k views

The Big Short - shorting vs CDS

I am wondering, why the main protagonists of the movie "The Big Short" bought CDS, which were actually custom made for them and quite expensive. Why they couldn't / didn't speculate on decline of ...
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2answers
80 views

Calculation for Hypothetical Short Position

I'm trying to calculate the gain on a short position. I think I have the correct calculation, I just want to make sure I am correct. Here's the data: 1. Entered position with stock price at $28.07. ...
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2answers
506 views

Can I donate short-stock to charity?

I have a short position that I have a significant profit on. Is it possible to donate this to charity the same way I might donate "appreciated stock", so as to avoid the short-term capital gains?
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3answers
929 views

Shorting stocks: Indicators that a stock will drop?

I always see articles about "predicting when a stock will rise", but haven't found something for the opposite. Are there any indicators or combination of things that are proven to indicate that a ...
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1answer
183 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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4answers
298 views

Does bull/bear market actually make a difference?

This may be an extremely naive question, but it is often discussed on the news, here and in person (at least in financial circles) that it is easy to make money in a bull market, and harder to make ...
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2answers
217 views

Shorting diluting stocks

If a stock just submitted an 8-K that shows that it's diluting (has "cashless exercises", "dilution", and "warrants" in it), shouldn't that mean it's bound to go down (with a high level of likeliness)?...
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2answers
1k views

What is the best way to short the San Francisco real estate market?

Best as in: 1. Liquid 2. Minimum borrowing costs
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1answer
401 views

Going long vs short, mechanisms involved

I am having a bit of an issue with regards to understanding a shortening position. If for instance a currency pair, such as the USDRUB which is trading around 70 RUB/USD right now, or 0.01428(=1/70) ...
4
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1answer
248 views

If a stock is sold but the purchase was canceled by the exchange, will it be considered a short-sale?

This question is asked as a follow-up to the question below; How can this stock have an intra-day range of more than 90% on 24Aug2015? BKCC had a 90% price fluctuation on 24Aug2015 and some buy ...
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1answer
915 views

Is there a time limit to cover an open short position? [duplicate]

Let's say there exists a stock X that I believe will soon embark on a general downward trend. I am interested in shorting X and decide to sell some quantity of X. I see my short position as being a ...
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1answer
72 views

Is there a way to short the general education market?

Or in part to short companies involved in supporting the current state of the education market? (book sellers, equipment vendors, universities etc..)
5
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1answer
680 views

How do Related Hedges work?

I'm currently re-reading Benjamin Graham's book, The Intelligent Investor. In it (Chapter 15), Graham mentions some of the undertakings and operations his fund, Graham-Newman Corporation, was involved ...
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2answers
467 views

Shorting the Shenzen or ChiNext Index

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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1answer
137 views

Does it make sense to add short positions to a diversified portfolio?

Does it make sense for most portfolios to have some short position? Is there a general rule (maybe a minimum of 10% should be hedged by a short position for high growth portfolios if you have a ...