Author Topic: how do you short?  (Read 1916 times)

bthewalls

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how do you short?
« on: April 02, 2020, 12:15:19 PM »
im not thinking of shorting right now, so dont all shout at me at once!.

I know what it means and how it works, just dont know how actually to do it and by what method.

Can anyone explain to me how to short for future purposes? Im uk based so answer relevant to uk would be really helpful.

thanks in advance.

baz


bacchi

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Re: how do you short?
« Reply #1 on: April 02, 2020, 12:21:59 PM »
Find a stock or ETF that you don't own and sell shares. You'll then be "-100" or whatever when you look at how many shares you own.

Or create a synthetic short and sell a call and buy a put.

Either way, you're hosed if the stock/ETF increases, which may cause a "short squeeze." Short sellers can't or won't maintain the losing trade so they cover and go to -0- shares owned, pushing shares even higher.

A safer, but less profitable, way is to buy a put outright. If the market goes against you, and rises, you're just out the put price.


Eta: Shorting a company stock is a great way to lose a LOT of money very quickly. If there's a surprise profit, or FDA approval, etc., then the stock could rise very quickly.
« Last Edit: April 02, 2020, 12:26:26 PM by bacchi »

ChpBstrd

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Re: how do you short?
« Reply #2 on: April 02, 2020, 09:12:40 PM »
Easiest: Buy an inverse ETF and let it place bets for you in the futures market. SDS is an example in the US market.
Easy: Buy a put option. Any expiration or strike price is a bearish bet. SPY is a very liquid target.
Moderate: Do a bearish put options spread by buying a put at a high strike price and selling at a lower strike price. Lose up to 100% or earn a widely variable amount in the timeframe of your choice.
Hard: Enter into futures contracts and manage the position - after earning a finance master's degree of course.
You're either a guru or broke: Use swaps, VIX contracts, volatility spreads on margin, etc.
« Last Edit: April 02, 2020, 09:14:27 PM by ChpBstrd »

vand

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Re: how do you short?
« Reply #3 on: April 03, 2020, 01:22:45 AM »
Spreadbetting or CFD account is the easiest way in the UK.
Do let us know how you get on...

MustacheAndaHalf

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Re: how do you short?
« Reply #4 on: April 03, 2020, 04:55:41 AM »
There's a way to short that no market can stop (sorry, Europe!), which I used in my experiment: sell your own holdings, and promise yourself to buy them back later.  You are short the shares you sold, until you buy them back at a later date.

Something to keep in mind:  If you don't use your own shares, but instead establish a "short position" at your brokerage, your risk is very different.  If you sell $5,000 worth of stock short, and that stock goes up 5x, you now owe $25,000.  You don't lose -100%, you lose -500% in that example.  If that's news to you, learn more first.

vand

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Re: how do you short?
« Reply #5 on: April 03, 2020, 09:20:50 AM »
There's a way to short that no market can stop (sorry, Europe!), which I used in my experiment: sell your own holdings, and promise yourself to buy them back later.  You are short the shares you sold, until you buy them back at a later date.


Being neutral is not the same as being short.

MustacheAndaHalf

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Re: how do you short?
« Reply #6 on: April 03, 2020, 11:43:52 AM »
Here's my example: I started with 73% equities, and sold off until I was 64% equities.  I sold off 9% of my stocks, and waited for markets to drop - which they did.  I then brought my equity percentage back up to 73%.
 In my view, 64% isn't a neutral position - it's 9% short of my usual 73% equities.

bthewalls

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Re: how do you short?
« Reply #7 on: April 03, 2020, 03:22:44 PM »
thanks guys.  will need to research those suggestions so that I fully understand them.

brilliant resource here, learn alot.

effigy98

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Re: how do you short?
« Reply #8 on: April 03, 2020, 04:04:10 PM »
Easiest way is just buy SQQQ. I keep a fixed percentage to that and re balance on these crazy swings. The tech companies are overvalued because people think stay at home economy will keep them healthy with record profits. Most people are either too optimistic or did not live thru 2000 and 2008.

vand

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Re: how do you short?
« Reply #9 on: April 04, 2020, 11:02:15 AM »
Here's my example: I started with 73% equities, and sold off until I was 64% equities.  I sold off 9% of my stocks, and waited for markets to drop - which they did.  I then brought my equity percentage back up to 73%.
 In my view, 64% isn't a neutral position - it's 9% short of my usual 73% equities.

*facepalm*

Do you ever read back some of the tosh you write?

You went from 73% long position to 64% long position.

Sorry, Mr Hedge Fund wannabe, but you don't get to say you're short until you sell your whole position plus also some stock which you don't own, ie a net negative position.

« Last Edit: April 04, 2020, 11:09:40 AM by vand »

bthewalls

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Re: how do you short?
« Reply #10 on: April 04, 2020, 02:52:22 PM »
Something to keep in mind:  If you don't use your own shares, but instead establish a "short position" at your brokerage, your risk is very different.  If you sell $5,000 worth of stock short, and that stock goes up 5x, you now owe $25,000.  You don't lose -100%, you lose -500% in that example.  If that's news to you, learn more first.
[/quote]

I've been following ray dalio for some years and really admire his generosity....for some reason I had lactched onto a comment from him that the next recession was ikely in spring/early summer 2020..naively i had gone with that idea....some weeks before the current dip I remember looking at my portfolio and thinking I should go to cash, espcialy telsa which is a long term fun bet for me.....this was totally on gut without any logic other that 10 year bull run had to end!....wish I had gone with my gut! lol


MustacheAndaHalf

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Re: how do you short?
« Reply #11 on: April 04, 2020, 11:17:31 PM »
Here's my example: I started with 73% equities, and sold off until I was 64% equities.  I sold off 9% of my stocks, and waited for markets to drop - which they did.  I then brought my equity percentage back up to 73%.
 In my view, 64% isn't a neutral position - it's 9% short of my usual 73% equities.

*facepalm*

Do you ever read back some of the tosh you write?

You went from 73% long position to 64% long position.

Sorry, Mr Hedge Fund wannabe, but you don't get to say you're short until you sell your whole position plus also some stock which you don't own, ie a net negative position.
The forum rules say not to make personal attacks, so be careful with that.  I plan to report you if you try to make this about me personally, instead of what we're discussing in this thread.

Selling 9% securities now with the intent to buy them later fits the definition of "a short", shown below:

"A short, or a short position, is created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price."
https://www.investopedia.com/terms/s/short.asp

Jeferson

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Re: how do you short?
« Reply #12 on: May 13, 2020, 12:21:14 PM »
Spreadbetting or CFD account is the easiest way in the UK.
Do let us know how you get on...

I agree spread betting is probably even a better option since he is based in the UK and therefore can avoid the stamp duty. If you decide to go ahead with spread betting or CFD trading, make sure you trade with a broker that is regulated by the Financial conduct authority or by the CySEC, do not settle for those off-shore scammer brokers. Particularly in the UK, Plus500 is a very popular option (it has been ranked by the Investment Trends 2019 UK Leverage Trading Report as the UKs No. 1 CFD Broker), so that might be your go-to broker, or IQ Option, but they have higher fees than Plus500.
« Last Edit: May 13, 2020, 12:29:15 PM by Jeferson »

frugledoc

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Re: how do you short?
« Reply #13 on: May 15, 2020, 01:20:44 AM »
Here's my example: I started with 73% equities, and sold off until I was 64% equities.  I sold off 9% of my stocks, and waited for markets to drop - which they did.  I then brought my equity percentage back up to 73%.
 In my view, 64% isn't a neutral position - it's 9% short of my usual 73% equities.

*facepalm*

Do you ever read back some of the tosh you write?

You went from 73% long position to 64% long position.

Sorry, Mr Hedge Fund wannabe, but you don't get to say you're short until you sell your whole position plus also some stock which you don't own, ie a net negative position.
The forum rules say not to make personal attacks, so be careful with that.  I plan to report you if you try to make this about me personally, instead of what we're discussing in this thread.

Selling 9% securities now with the intent to buy them later fits the definition of "a short", shown below:

"A short, or a short position, is created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price."
https://www.investopedia.com/terms/s/short.asp

It was a pretty amusing personal attack :)

vand

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Re: how do you short?
« Reply #14 on: May 15, 2020, 02:39:34 AM »
"A short, or a short position, is created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price."
https://www.investopedia.com/terms/s/short.asp

you're not selling it first, you're selling something you already own, ie AFTER you have already bought it. That's not first, that's second.

People who say that up is down, black is white, are the type of people who call a subsidy a tax or an increase a decrease and deserve to be called out and attacked.