DO you guys short stocks?

[pahagwl]

Shorting is when you sell stocks which you do not own. You do this in order to earn profit by buying them again at a lower price. Basically, the trader the pockets the difference between the sell price and buy price. So, I wanted to know if you guys do this and have had success employing this strategy in the stock market.

[dolly fsession]

I am new to this forum.and I have gained many wonder full information from this forum.

[crimsonghost747]

I have thought about it, but haven't done it at the moment.
There are couple of things to consider, firstly the average stock will yield a profit in the long term, so it will be harder to find a stock to short than a stock to buy.
Not only will you have to pay commission and taxes, you will also have to pay a small percentage (specific to each stock) for the one who loaned you the stocks that you sold. The interest for this loan is usually quite small and is calculated on a daily basis.

Also keep in mind that whereas with normal investing you can only lose the amount that you invested in... and even that is the absolute worst case scenario, when selling short there is no upper limit to your losses.

[tracyjones]

Yes I have been shorting the right stocks for years. The key is to be very careful and only short with certain stocks that are showing a very good setup. I learned my short trading techniques online. I searched for learn to day trade forex and noticed many services. After 8 months of losing I finally found a good service. If you would like the service is http://fxlivedaytrading.com . He will sometimes discuss stocks and discuss good setups.

I got out of my Tesla longs yesterday for a nice 2% day trade I was wondering if anyone has any good setups?

Tracy

[Lostvalleyguy]

crimsonghose747 has it right. Really you invest normally expecting a stock to go up. Selling short you expect it to go down. This is sort of a pay now or pay later idea. The difference is that a $1000 risk could turn into a $1000 loss at max if you invest normally. There really is no limit to the potential loss from selling short which means that you need to be prepared to lose and lose a set amount with a sell (for a loss) at that set amount.

Selling short is not a bad thing, but it takes a more disciplined approach and a more stalwart investor.

[DomDom]

If you are investing then there is really no reason to short, if you are going to trade then shorting stocks is a must!

[soopersonic]

Short selling sounds like a good idea in theory, but you would need to evaluate and manage the risks more vigilantly that with a buy and hold plan I think. I agree crimsonghost's reply above, perhaps the first step here is to identify your primary goal with trading, a "mission statement" of sorts. If that fits into your long term investment and life goals, then proceed to due diligence part 2.

[fredkawig]

I don't know this technique. It is a good advice. Although I haven't really tried trading myself, only virtually and it is kind of fun. A lot of people gain a lot of money from trading stocks specially when they have a huge amount of money to play with.

[owesem75]

Unless you have plenty of cash to spare for Short trading, this strategy is expensive. I am investing hoping to earn some passive income through dividends and own shares of good company.. and not necessarily make my broker get commission from me through this risky strategy.

[crimsonghost747]

Unless you have plenty of cash to spare for Short trading, this strategy is expensive. I am investing hoping to earn some passive income through dividends and own shares of good company.. and not necessarily make my broker get commission from me through this risky strategy.

Same amount of cash required as for regular trading. And you can always use products which are more leveraged if the commissions are too high, though this of course increases the risk, and a stop loss should be used especially when shorting.

I too prefer investing in the long term, it's all about the risk. While trading can yield great profits in short time, you need both skills and luck if you want to make a profit in the long term.