@Beastorio You have until you are "margin called." For instance, if I have a margin of 50%, and I have $1000 cash, I can short sell $2000 worth of stock. Now if the stock rises, my cash position will dwindle away because I want the stock to go DOWN. Say I have now $500 in cash because of this, my margin rate would be $500/$2000, or 25%. This is too low and I'd have to repay the loan or add more funds. You also get called if the broker runs out of shares of the borrowed stock.
My friend, who's a broker now, started his career in financial services working for IBM. IDK what he did there other than meet his ex-wife. I don't like when he talks about HER, but I'm willing to listen to a little of it.
I don't think he was a broker at IBM. He told me he became a broker when he started working for NYSE.
Talk about the damn naked shorts now that you've covered the widgit factory professor. That's Rodney Dangerfield back to school reality and market manipulation.
So this is somewhat like a Bond? A debt security on the brokerage firm? Only the debt is based on the bet that IBM will fail, and the brokerage firm will pay out with no/low risk? I can see how this could devastate our financial system... Zeitgeist style... *goosebumps*
Yeah but the risk with a stop loss is that you could lose small when you could have won big. Taking Sal's example, let's say you put a stop loss once the share price reached $110, so your loss ceiling is $10 per share, but it could have gone to $110 and then dropped down to $50 as predicted, you lost $10 and the opportunity cost of not holding the position was $50.
Timeline is AMAZING, Why am getting introduce to you after COLLEGE... Errr
dlaskew2 2 months ago
Thanks God I knew about Khanacademy. Thank you Sal :)
spirituelconnexion 3 months ago
How does he sell the share, through the same broker or does he trade online? This is not clear in both the videos.
smurfieboo 5 months ago
Comment removed
smurfieboo 5 months ago
how long is the time period of the borrowed stock? How long do you have until you have to buy the stock that you borrowed?
Beastorio 7 months ago
@Beastorio You have until you are "margin called." For instance, if I have a margin of 50%, and I have $1000 cash, I can short sell $2000 worth of stock. Now if the stock rises, my cash position will dwindle away because I want the stock to go DOWN. Say I have now $500 in cash because of this, my margin rate would be $500/$2000, or 25%. This is too low and I'd have to repay the loan or add more funds. You also get called if the broker runs out of shares of the borrowed stock.
iNinjaNotes 1 month ago
how do you know so much about unrelated topics!!! physics chem bio econ etc
Abdullah19910 7 months ago
can you do me a favor...can you post more videos...I think your a great teacher man
Acekingshi 8 months ago
My friend, who's a broker now, started his career in financial services working for IBM. IDK what he did there other than meet his ex-wife. I don't like when he talks about HER, but I'm willing to listen to a little of it.
I don't think he was a broker at IBM. He told me he became a broker when he started working for NYSE.
vickiormindyb 10 months ago
@vickiormindyb Cool story bro.
CarnifaxMachine 1 week ago
HOly shit. You are an AMAZING teacher.
ImaYam 1 year ago
This comment has received too many negative votes show
i recommend u KISYFS
KEEP IT SIMPLE YOU FUCKIN STUPID!
BarrackObamah 2 years ago
now youtube makes sense, finally! :)
denismos 2 years ago
Talk about the damn naked shorts now that you've covered the widgit factory professor. That's Rodney Dangerfield back to school reality and market manipulation.
prrolg 3 years ago
No short selling, no short covering. No short covering, no bids. No bids = Crash
Dirty420South 3 years ago
Didn't the Volkswagen shares explode recently because of short sellers? Can you elaborate?
Kratzbyrste 3 years ago
so could you explain the term long a bit
Long is just a standard BUY of a share correct? You don't actually borrow from broker or anything.
4rcane 3 years ago
So this is somewhat like a Bond? A debt security on the brokerage firm? Only the debt is based on the bet that IBM will fail, and the brokerage firm will pay out with no/low risk? I can see how this could devastate our financial system... Zeitgeist style... *goosebumps*
spikesmth 3 years ago
yeah and in the meantime the broker is making money on ALL the transactions.
aw3212 3 years ago
On the CNN video I watched, the guy said you're an Economist.
I thought you worked in Computer Science, b/c you said you wrote computer programs.
I usually don't like CNN, but I enjoy it when you're on it.
vickiormindyb 3 years ago
You need a Stop-Loss! Not only it prevents you from losing ALL your money on one trade......it also keeps your losses small.
masakmerah 3 years ago
@masakmerah
Yeah but the risk with a stop loss is that you could lose small when you could have won big. Taking Sal's example, let's say you put a stop loss once the share price reached $110, so your loss ceiling is $10 per share, but it could have gone to $110 and then dropped down to $50 as predicted, you lost $10 and the opportunity cost of not holding the position was $50.
theporksicle 1 year ago
That made more sense this time when you showed the borrowed IBM share as populating both the asset and liability columns, thank you.
lvecsey 3 years ago