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/biz/ - Business & Finance

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50600689 No.50600689 [Reply] [Original]

>Been on /biz/ 3 years
>Watched dozens of videos about shorting
>Still don't understand it

>> No.50600706
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50600706

>>50600689
say what now

>> No.50600724

>>50600689
I know what it means but scared as shit to do it. Everytime in hindsight I regret because was nearly always right calling peaks.

>> No.50600749

>>50600689
>IM BETING ON THE VALUE TANKING, THE NUMBER WILL GO DOWN!
that simple.

>> No.50600789

Isn't shorting just borrowing price-volatile assets and then selling them for stablecoins/fiat in the hope that the price of the borrowed asset will go down so you can buy it back to pay off the debt and pocket the leftover?

>> No.50600808

>>50600724
When you've shorted enough you stop being able to predict it. You just have beginners luck. Today at the fed meeting I was stop lossed out of my short. I couldn't tell it was going to be bullish I have run out of beginners luck.

>> No.50600815

>>50600689
>go to gains.trade
>set the collateral(what you are willing to bet) and leverage
>wait for a big green candle or momentum and wait for when you think it peaks
>open short
>rope when it goes up more
it is that simple

>> No.50600912

>>50600689
you borrow an asset an immediately sell it promising to buy it back at a later day or when you "close" your shorts.

Borrow asset A for 100 dollars and immediately sell it. The asset goes down 10% down to 90 dollars where you close your short and buy it back. you've made a 10% profit. Now you can keep the asset or simply sell it for reals this time on the open market.

This is one way of shorting. There are several other ways of doing this with different instruments that doesn't risk moving the market.

>> No.50600986

I'M ABOUT TO GET MY SHORT LIQUIDATED!! AHHHHHHHHHH!!

>> No.50601013

>>50600689
>can't understand shorting after dozens of videos
are you a bot or just a retard? it's not complicated.

a. prerequesite: you need to have people who own shares who are ok to lend them to you (stocks you buy in a margin account can be lent to others). if nobody wants to lend you their shares, you can't short it, the shares are unavailable or you have to pay a lot of interest.

let's say you want to short apple. 1 share = 500$. you borrow 1 share from someone with the intent of giving it back at a later date. like hey bro can i just borrow you this share? i'ma give it back to you soon no matter what. the guy agrees and lend you his apple share with an interest (he won't lend it to you for free, every day you have his share you pay him a little bit). So the guy lends you his share. great

1. you now have 1 apple share, you immediately sell it for 500$.
2. price of apple goes to 250$. you decide to close your short. closing your short means buying back the shares. you can now buy 1 apple shares because you have 500$.
3. but remember, you have to give 1 share back to the dude who lent it to you + interest. hey dude thanks for lending me your share, here it is homie i give it back to you, 1 apple share + 10$ of interest. the rest of the money is for you (500-250-10). you just made 240$ shorting. the buddy lending you the share is your broker.

>> No.50601200

>>50600815
So if it goes up then you owe money? Is there any way to set it up so it just immediately sells if it goes say $500 up?
I've zero experience trading, just curious.

>> No.50601304

>>50601200
You can only lose money up to your collateral. It is the amount you are betting essentially. And that is only if it goes opposite what you guessed short/long.
You obviously gain money if you guess correctly.

>> No.50601422

>>50601304
>You can only lose money up to your collateral
only in crypto. with stocks you can lose much more than your margin. if there is no liquidity and the share does a x100 immediately, you have to buy back the share at any price

>> No.50601604

>>50600689
you sell then buy anon its not complicated. you are borrowing coins or shares from exchange and selling them first, then you are obligated to buy them back at later date in the hopes the price is lower and you pocket the difference.

>> No.50601658

>>50600689
You borrow 1 bitcoin from me. You need to pay me back that bitcoin+0.2% by next friday. You immediately sell that bitcoin for $22,750. The price drops and you buy a bitcoin for $21,000 and give it back to me with the $42 interest. You pocket $1708 dollars.

>> No.50602041

not op but this thread is very helpful as someone that wants to get into trading. hwo does leverage make you more or less money?
also how does a long work?

>> No.50602677

Bumping for interest, would love to read more info itt, also learning

>> No.50604655
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50604655

>>50600749
please, anon. don't encourage the boy

>> No.50604766

>>50600789
yep

>> No.50604775

>>50601200
google "stop loss"
jesus christ this board is fucking dumb these days...

>> No.50604836

>>50602677
>>50602041

omg you fags

fine ill help. leverage will lose you your money if youre asking these questions first off. so stay away with this level of ignorance.

lets say you have $100, you could buy $100 worth of bitcoin, then bitcoin goes up 10%, if you sell it all, you now have $110.

If you have $100 and buy bitcoin with 2x leverage, then you now have $200 worth of bitcoin, if it goes up 10% and you sell it, you now have $120.

Whatever you would make (or more often, lose) is multiplied by your leverage. Likewise, you will loose ALL of your money if the the price moves against you too much.
at 10x, you lose everything at 10%
50x at 2%
100x leaves you just a 1% margin of error

>> No.50604880

>>50604836
It's way more dangerous than that. 1x is less safe than spot. Also there are diminishing returns or/and fees over time in most cases that I don't know even if they're guaranteed to stay predictable.

>> No.50604911

When u short 100$ of cringecoin and get 100 cringe tokens (which can be exchanged for Reddit karma at a 1:10000 ratio), you are borrowing 100$ of cringecoin from Mr shekelsberg, with a promise that he gets 100 coins back at a later date, except you sold yours and if you can't pay Mr shekelsberg back his coins, your money is used as collateral to get shekelsberg his coins back. If the coin drops to 50 cents you only need to rebuy 50$ of the coin and sbekelsberg still gets his 100 tokens, except they're worth less now.

>> No.50604929

>>50600689
download bitMEX calc on app store and play around with fake numbers. then make a play account on bitmex. try 100x and 2x leverage and see the difference. in reality dont short more than 10x unless you want to casino it

>> No.50604938

>>50600689
use leveraged tokens, they only max 3x on the underlying asset but you can't get liquidated.

>> No.50604948

>>50600689
you borrow an asset and sell it, expecting it will become cheaper some time later. when it's to pay the loan back, you rebuy the asset a lower price and keep the difference. that's it.

>> No.50604953

>>50600808
I didn't check shit all day and just realized everything boom'd. What were the good news?

>> No.50604974

>>50600689
>"I pretend I own this stock, want to buy it from me?
>"Sure!"
>Buy it later at a cheaper price and fulfill the earlier sale
What's not to understand?

>> No.50605023

>>50604974
>ok mr shekelberg let me borrow 1 whole btc!
he gives me 1 btc when the price was 30k
>ok mr shekelberg the market is looking to go into a huge downturn you can have this btc back now thats it 20k!
???
PROFIT!
why would he want it back? its worth less now. i guess my main question is why would he let me borrow it in the first place and why would selling it at a lower price better than letting me borrow the money to go long instead?

>> No.50605103

>>50600689
Based brainlet

>> No.50605133
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50605133

>>50604948
The question is if you can see more lower prices in the near future. Because any influencers can manipulate the market by just posting a shitty tweet and they will long for sure.

>that's dumb

>> No.50605185

>>50605023
>why would he want it back?
mumu wants it back at 40k not 20k

>its worth less now.
in that situation yes. its called trading with contracts

>i guess my main question is why would he let me borrow it in the first place

the house, not mumu or bobo, lets you borrow from either mumu or bobo long and short money and charges a fee towards either longs or shorts depending on the market swing. the house encforces contracts

>and why would selling it at a lower price better than letting me borrow the money to go long instead?
contracts. chose wisely to be either mumu or a bobo

>> No.50605201

>>50605133
you could analyze the metrics of a company, for example. for crypto it is a literal gamble.

>> No.50605290

>>50605201
Yeah it is a gamble but it can also be translated like a faster version of stock market. I don't trust big influencers any more because they always dump on their followers after shilling a shitty project. I prefer small ones now.

>> No.50605377

>>50605290
this doesn't make sense shitfag

>> No.50605391

>>50605377
That's true just like your whole life, which is a mess. I can get guaranteed presale allocations through the help of small influencers especially if they joined KOLnet initial marketing offerings. You don't know because you are busy checking random shitcoins on BSC. Kek.

>> No.50605501

>>50605023
You don't borrow anything, you create it out of thin air on a promise you'll buy the thing later

>> No.50605549

>>50600689
>you own a bitcoin
>I tell you that I want to hold your bitcoin for 1 year and will give you 1.1 bitcoin in return
>I sell the bitcoin thinking that the price will decrease
>I buy back the bitcoin after the price has decreased keeping the money left over
>I give you back the bitcoin plus the 0.1 btc in interest

>> No.50605612

>>50605391
any clues? last time I tried using twitter for that as soon as i began following several crypto people i began getting a lot of scam dms.

>> No.50605866
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50605866

>>50600689
Essentially, the exchange lets them sell an I.O.U. It's just digits in a computer, anyway. As long as the total number of shares in all accounts equals the total number of shares that exist, why should the computer care if some accounts have a negative number of shares?

They normally only let people or organizations with deep pockets sell naked shorts, because if the price goes up too rapidly, they must have the resources to pay off the gamble.

If you have bitcoins on an exchange that lets people do naked shorts, do you trust the exchange's procedures at vetting those it allows to do so? What would happen to you if the price goes up, the naked sellers cannot cover their bet, and the exchange doesn't have the bitcoins when you want to withdraw?

Anywho that's why i don't short anymore, im more in the NFT side of things (fully investing in $CHAMP and whatever ubisoft decides to do next), peace

>> No.50606105

>>50604938
is it smart to hold them longterm? or are there any reasons why someone shouldnt do this

>> No.50606195

>>50600808
It was obvious it would pump. Pay attention next time

>> No.50606211

>>50606105
No more than 24 hours. Check the charts to know why

>> No.50606217

>>50606195
Holy shot we have same IDs

>> No.50606222

>>50606195
Wait no this post was made by me. I'm retared