For anyone who sold short yesterday

[Rob_ee]

Being new to the market I sort of understand what selling short means BUT don't really understand how it works exactly....

From reading the "Amazing life of Jessie Livermore" he sold short and made a massive fortune in the 30's during the crash


My questions ... how do you sell stocks you don't actually own ..
To whom do you sell.

The idea you buy PDN for $8 and hope to buy back for $7 sometimes in the future therefore pocketing the $1 difference.

The person/s you sold to ... who specifies the time frame when you have to settle ... can you take months.. years or is there a time limit ??

Sorry to be ignorant but am trying to slowly learn all aspecys of the share market.
If this has been explained before I apologize ... is there a link somwhere to read.

Finally the reason for this post ... I read many references here where people were going to go short yesterday during the 100+point sell off.
Today up 80 points ..how are you going to handle the shorts from here ??
Pressumably hoping for another big sell off...

Rob

 

[coyotte]

There is a list of SHORTABLE stocks on the ASX site.

Easiest way is to do it is via CFDs -- the provider will have thier own list as well.

Basicially you are BORROWING (selling) the STOCK from the Broker/CFD provider which you MUST BUY back in the future --- normally there is no time restriction.

Once you done it and get the hang of it, it is really no different to going LONG --- but is more risker imo -- there is a art to the profit taking which does take practice.

You can also use Shorts as a hedge against a LONG position -- just make sure the the SHORT was above the LONG stop.

Cheers

 

[Rob_ee]

There is a list of SHORTABLE stocks on the ASX site.

Easiest way is to do it is via CFDs -- the provider will have thier own list as well.

Basicially you are BORROWING (selling) the STOCK from the Broker/CFD provider which you MUST BUY back in the future --- normally there is no time restriction.

Thanks coyotte ... so what you're saying the broker/CFD guy is in fact saying I am smarter than you because I don't believe the stock will go down?

I will read more on CFD's .... as a matter of interest who historically does best out of this game ..the shorters or the providers?

AND if there is no time restriction why just not wait untill the market crashes again sometimes in the future?
Rob

 

[It's Snake Pliskin]

Being new to the market I sort of understand what selling short means BUT don't really understand how it works exactly....

From reading the "Amazing life of Jessie Livermore" he sold short and made a massive fortune in the 30's during the crash


My questions ... how do you sell stocks you don't actually own ..
To whom do you sell.

The idea you buy PDN for $8 and hope to buy back for $7 sometimes in the future therefore pocketing the $1 difference.

The person/s you sold to ... who specifies the time frame when you have to settle ... can you take months.. years or is there a time limit ??

Sorry to be ignorant but am trying to slowly learn all aspecys of the share market.
If this has been explained before I apologize ... is there a link somwhere to read.

Finally the reason for this post ... I read many references here where people were going to go short yesterday during the 100+point sell off.
Today up 80 points ..how are you going to handle the shorts from here ??
Pressumably hoping for another big sell off...

Rob

CFD's Rob.

Still have 1 short on currently in the red but still not near my stop. I'll see this one through. Today might be up but doesn't look too strong.

 

[It's Snake Pliskin]

Thanks coyotte ... so what you're saying the broker/CFD guy is in fact saying I am smarter than you because I don't believe the stock will go down?

I will read more on CFD's .... as a matter of interest who historically does best out of this game ..the shorters or the providers?

AND if there is no time restriction why just not wait untill the market crashes again sometimes in the future?
Rob

MM's take more of your money than Direct Access providers.

 

[coyotte]

No ones saying they're smarter --- it's just another tool to use.

I have found IG Markets ideal for SHORTS --- just do not use a GSL as they will catch you out --- LONG or SHORT.

Cheers

 

[Kauri]

No ones saying they're smarter --- it's just another tool to use.

I have found IG Markets ideal for SHORTS --- just do not use a GSL as they will catch you out --- LONG or SHORT.

Cheers

coyotte,
How do they catch you out??

 

[coyotte]

coyotte,
How do they catch you out??

During the course of the trading day prices are identical to Comsec.
It's on the OPEN and 4.00 to 4.10 area that prices can be badly misaligned.
As you can't trade in these time slots you can get caught out with a GSL -- especially the OPEN.

Just my observation.

Cheers

 

[Kauri]

During the course of the trading day prices are identical to Comsec.
It's on the OPEN and 4.00 to 4.10 area that prices can be badly misaligned .
As you can't trade in these time slots you can get caught out with a GSL-- especially the OPEN .

Just my observation.

Cheers

Do you use MM, on the L2 platform with DMA you can trade the auctions..
The different bids/asks during the auction shouldn't set off a normal SL or a GSL as they are only activated by the underlying actually trading at that price.. if you are getting caught I would be on the phone straight off..
Cheers.
Kauri

 

[coyotte]

MM
Will have to look into the L2.

Used to get caught with CMC all the time -- thats why I dropped em, and went over to IG -- but got caught on an open with them -- never used GSL since.

Cheers