/biz/ - Business & Finance

>borrow shares from your broker
>sell them
>buy shares on the market and give them back to your broker
>profit?

>>762017

you gotta buy futures
it's a type of option

>>762082
wrong entirely, its a form of credit default swap :^)

It's basically a bet.

So, say you've got stock AAA, which is trading at like, 100 points per share. Now, you're thinking after a recent product flop and other stuff, their X quarter financials will be lower than they are. So you call up your broker, and say, "I want to short 50 shares of AAA". He'll put it into the system, and if the stock does drop, wala, you made money!

At least, that's somewhat how it works. I'm not totally sure if you give them a point amount you think it'll go down by.

Also, there's this really cool thing called Google! And Youtube! And Investopedia! FUCKING USE THEM.

>>762102
>Also, there's this really cool thing called Google! And Youtube! And Investopedia! FUCKING USE THEM.
Take your own advice. Your explanation was horrible, incomplete, and mostly wrong.

>>762033
>>762102

Isn't this illegal (unless you have your HFT system do it for you)?

>>762659
no.

>>762656
true but it's not like OP deserves much more.
If OP had an actual account with a stock broker he could just see for himself. And if he doesn't then he doesn't need to know more.

Bizfags always say short this stock or that stock without ever mentioning you need a fucking fat bankroll before your brokerage firm will even consider letting you short stocks.
>the market can remain irrational longer than you can stay solvent.

>>762870
>Bizfags always say short this stock or that stock without ever mentioning you need a fucking fat bankroll before your brokerage firm will even consider letting you short stocks
And this is our problem how? Not everyone can qualify for Level 4 options trading either. Does than mean we shouldn't discuss advanced options strategies?

>>762884
iv never once seen /biz/ talk about exotic options. I hears someone reference a strangle strategy once and another use an image of the SABR model and thats about as advanced as the stuff on here seems to be. In fact options are nearly never talked about

>>762033
This.
>>762082
NOT this.
>>762659
Not at all.
>>762661
Correct.
>>762102
>calling broker
>2015
also horrible explanation.
>>762870
You only need $25k poorfag.

>>762884
Not a problem, just pointing it out.

>>762102
Horrible explanation.

>>762656
Agreed with this Anon.


>>762870
> You need a fucking fat bankroll before your brokerage firm will consider letting you short stocks.
Also wrong.

>>762921
>Only need 25K
For some Brokers, yes. But not all Brokers.


You have been watching ABC stock, and it seems to be downtrending. You also anticipate a bad earnings report.

You decide that in this situation, the best situation is to short shares.

You borrow 1000 shares from your broker at 5.00, taking a portfolio balance of -1000 shares


You were right. It broke through support and is currently standing at 4.70 a share.

You decide it's time to take profits, so you place a buy order for 1,000 shares at 4.70, which is then filled. Because you bought the shares back, you no longer have a balance of -1000 shares.

You have just made 30 cents a share. You shorted from 5.00 to 4.70.

You do not need alot of money to short shares, or any of that nonsense. Suretrader offers alot of shares to short at no fee, you just need $500 in your account, which is pretty basic for a Brokerage.

>>762017
You short the stock

>>762921
>>>762870 #
>You only need $25k poorfag.
With 25K you either have to take small positions to stay within margin requirements or take larger risk and hope like hell you're right because if the market moves against you you're fucked v
>what hotshot here isn't telling you is that shorting a stock isn't like the opposite of buying a stock. If you buy a stock and the company goes bankrupt the next day you lose your money and that's it. If you short a stock and the stock goes up you can lose far more than your original investment.

As risky as it gets, but if you don't have 25k and want to short with leverage you might wanna look into CFDs. Just stay away from Plus500.

>>764119
>Suretrader

Oh yeah off-shore brokerages work as well, just make sure you read the terms and conditions.

>>762017
>Borrow stock on repo market.
>Sell it.
>Price goes down.
>Buy it back.
>Close out the repo.

>>764196
I use Plus500. Never had a problem

>>762102
>wala