What is Short Selling?

[sk8bow]

funny money

[ExRussian86]

Yeah.....except no one mentioned anything about margin. Good luck getting any money back on 50% margin.

[thisisgame]

Are you able to give back the borrowed stocks at anytime? Or does it have to be a particular time?

[mobster72787]

thx!!!!



[SleekMinister]

One thing bothers me. "Borrow" stocks from a broker? How is that different from buying?

[ironmantis25]

@SleekMinister

you have to give back that particular stock to the broker.

[Noobssuckass300]

@ironmantis25 So the lender is basically taking a bigger risk than the borrower if the company is doing poorly.

[yolo22]

whew! thank you so much for explaining that. i couldn't find a clear explanation anywhere else.

[cow1hongkong]

great video, first time I've understood this!



[SyCreations]

Thank you very much for posting this. I love the way you teach us exactly what short selling is. I am a visual learner, so this video helps a lot. Thanks!

[wcoy79]

awesome video. Question: If you enter a short position, how long are the terms. For instance, what if you think a stock will go down in value, but it takes 8 months for that to happen. Lets say that at month 4 the stock shoots up in price forcing you to cover your margin. However, at month 6 it starts to fall back to even only to end up below what you paid for it at month 7. Can you at this point decide to buy back the stock? Is each short position defined with a specific time/maturity date?

[michalchik]

What is the financial incentive for the broker or the other sellers to lend you stock?

[Shyhalu]

@michalchik Most likely fees and/or small amount of interest on the loan.

[hallaisback]

@michalchik they get money from it

[michalchik]

@hallaisback Yes, but that is still a problem. If the stock price goes down as the short seller expects, then the brokerage has lost money holding onto the contract of a stock that depreciates. So either the brokerage is betting against the short seller, or they are still suffering a net loss of money.

[CureFan123]

Great description of short-selling. Thanks!

[WOGI5M]

thanks, this video was very easy to understand.

[MUSICisLIFE631]

That was as simple as possible and now I finally understand how to sell short...not that I would of course haha thank you very much!

[JimmyFox01]

I got it, Thank you very much.

[enemyartistkristofeR]

Nice video, I learned something new. Thanks.