How to short sell online?

[weev]

Hello

Let me first say I am a long investor. But I would like to know how to sell short. This is more about the practical knowledge so I understand the game, rather than something I want to do as I'm still undecided to its virtues.

I have an account on OptionsXpress Australia which is pretty usable but it doesn't teach you about the more intricate trades.

In this case the Action is Sell Short.

Under Price are these option
---
Price
( ) Market
( ) Limit $xxx
( ) Stop $xxx
( ) Stop Limit
( ) Market On Close
---
key
( ) : checkbox, choose one only
$xxx: add $ but in only either option

OK, my theoretical problem is shares YYY are trading at $10. I want to sell short at $9.

The principles of Short Selling are still vague. Forgive my ignorance.

How do I set this up in my online account?

If anyone is a good teacher I will be attentive.

cheers and thank you.

weev

 

[Trembling Hand]

In this case the Action is Sell Short.

Under Price are these option
---
Price
( ) Market
( ) Limit $xxx
( ) Stop $xxx
( ) Stop Limit
( ) Market On Close
---
key
( ) : checkbox, choose one only
$xxx: add $ but in only either option

OK, my theoretical problem is shares YYY are trading at $10. I want to sell short at $9.

Weev not sure about OptionsXpress but they look like order types.

Not sure what you mean buy YYY @ $10 I want to sell short @ $9.

Do yo mean you want to short YYY if it gets to $9? If so you would use a Stop order.

 

[weev]

Hi Trembling Hand, thanks for trying to explain this to a newbie.

I attached a screen shot of the order screen. Hope that makes more sense.

So if the stock is currently trading at $10 I want to short it at, for example $9.

So this would mean I make a $1, right?

How do I configure in the order screen?

cheers and cheers.

 

[Trembling Hand]

OK, your terminology is a bit off.

You don't want to short sell @ $9 that is your Target and where you will 'cover' the short.

You will place a short order when the stock is at $10, either market or limit what ever you decide to be best.

Then you are now short YYY @ $10.

If the YYY falls to $9 you will place an order to cover or buy at $9.

Just be careful that when you Cover that the buy order is a buy to close short position. Some brokers have different orders to go long or to close (cover) a short order. It will be in the box I have marked. This is very important.

Also it seems from this you can place a linked Stop order which is always a good Idea.

 

[weev]

cheers for your help, its a lot clearer now

weev

 

[CFD]

Are you familiar with the use of "stops" as a means of managing risk?

If you buy "long" at $10- the most you can lose is $10-
If you buy "short" at $10- the most you can lose is ?

IMHO the use of stops should not be considered optional when going short.