Thrasher University: What is Short Selling?

Everybody knows you can profit when the price of stock goes up...but what about when prices are going down? There's always money to be made and short selling is another (and more dangerous) way to do it. Never heard of it? You have now. Watch and Learn.

Category:

Howto & Style

Tags:

• short
• selling
• cover
• stock
• market
• 50
• cent
• Less
• than
• Jake
• gen
• tom
• brady
• jim
• chanos
• enron
• pass
• music
• money

[tanbrolo]

Great video as usual. So how do you 'borrow' stock? And how do you do this without incurring any fees? Someone is willing to sell you their 'shirt', then accept nothing but a 'shirt' back in return?

[ThrasherTV]

Tan, you would actually pay interest on the amount of stock you borrowed, so the person would receive their "shirt" back, plus a little. This video focuses mostly on the trading concept and understanding that part, but there are nuances like the one that you bring up here that we'll tackle in another, more advanced video.

[calvin1392]

Is this kinda like trading commodities?

[ThrasherTV]

Nothing like trading commodities, but we'll make sure to do one on commodities in general and how they are traded and what makes them different from stocks.

[odraciRRicardo]

What exactly is borrowing a share? Buying a share is buying a percentage of a company? But what's borrowing? Why would a company or a shareholder let someone borrow a share?

I'm missing that part.

[ThrasherTV]

Think about it like taking a regular loan. You borrow money and you have to pay it back with interest. It's the same thing with borrowing stocks to short sell them. When you borrow the stock there is actually a cost associated with it, so the lender expects to make a little profit by lending you the stock. We wanted to cover the concept in this video and will get into more advanced details like this in the next short selling vid. Good question.

[danhamon]

AWESOME video!!! Now I understand the basic idea of sell a short---where is part 2? I'm really excited to find out more---thank you for sharing your knowledge in a understable way

[PlayBoyPabloPablo]

thanks dudes you has been giving me a educations

[jimmypinero]

Amazing video!! Very informational and useful.

[hellcat90]

Nice video, but bad jokes are bad.

[playboyquan]

hey Thats my last name!

[corpotol]

cool

[Catchetat]

lovely stuff!!!!!!! does it cost to borrow the stock in the first place?

[leoinemoon2889]

hey, i will be so looking forward to it.

is it not out yet right since i could not find it here.

[BBCcashville]

Great Video... Go long..lol

Hey I was just curious, is the advance video out yet? I would like to see how a naked shorting would work on a POLO shirt.

I still think the SEC was wrong for banning the shorts from the Financials.

Great Video by the way.. keep up the great work.