 Hello, everyone, and welcome. This is Melissa Arva with The Stock Swoosh, and today I wanted to talk to you about shorting why. There's been a lot of discussions about shorting, is shorting good, is shorting bad. For the market, people have different opinions, and that I have different opinions from people that I know, people that I'm friends with about this, people who are in the markets for a long time, people that are on TV. I disagree with some of them. Here's my take on it. First of all, I teach people how to short. And I've made an entire career out of shorting why, because, again, shorting gives me a niche. A lot of people don't know how to do it. And then take the people that know how to do it. A lot of people don't know how to do it well. So I'm very good at reading weakness. So therefore, I can really see where's the proper placement and what stocks specifically, even the market too, where to short them. So basically, when you're shorting something, you're betting the price is going to go down. You take the trade on your platform, I'm not going to get into the technical aspect of that right now. You can get trained by your broker in order to how to press the button to short. But how I determine if something's going to drop is using my system, and I'm spotting weakness, to be able to determine whether something's going to fall. I also like to short because shorting moves, selling moves happen quick. Okay? Panic comes into a stock pretty quickly, and it can tank something. Like out of nowhere. It could happen in seconds. It could happen in minutes. It could happen overnight in a gap. And we saw that. We saw that almost a year ago with COVID. That's for one. But anyways, getting back to this whole discussion about shorting good for the market, bad for the market. Actually, shorting is good for the market. It's healthy for markets. You can't stop allowing shorting. That just would make no sense. You'd have stocks just rallying all the time, and it would only move when someone would sell them. And if people are doing nothing but buying stocks, then no one would ever sell them. You wouldn't have a healthy market. You wouldn't have volume. You wouldn't have momentum. Nothing would hardly move. It would be a ridiculous concept to get rid of shorting in the market. It's just not going to happen. So anyone that's talking about that or thinks that or even is saying that, it's out there in La La Land. They're not going to stop allowing people to short. People will continue to be able to short stocks. Okay. Now, if you've never shorted and you don't know, sometimes you go to short a stock and you can't short it. Why? Sometimes it's a restriction. The broker has a restriction. They have a set number of shares. They're only allowed to access to you. They only have a set number, could be whatever amount it is or whatever given stock, depending on what's happening on the day, there's only a certain amount of short interest. So those, those are requirements, but we've always had those. We've always had those where there was restrictions on sometimes certain stocks that you can't short. And many of those usually are the cheapy ones, ones that I don't do and have never done and wouldn't do anyways. Okay. I also don't like to do anything that has a risk of being halted. Okay. Too volatile, has a risk of being halted. I've never traded the VIX years and years ago. Remember that was a problem a couple of years ago for those of you that have been trading a long time. Anyways, you know, I just do normal stocks. And also, when you short a company, you're not betting that it's going to fail. Okay. We've shorted the market. The market isn't going to go under and he's done soon. We've shorted some of the strongest stocks in the, in the, in the world. Some of the strongest companies in the world. We've shorted Amazon before, you know, and made money. The reality is when you're shorting a company or you're shorting a stock, you're not betting that it's going to fail. I heard someone say that too. It's completely false. That person didn't know what they're talking about. Okay. When you are shorting something as an active trader, you're basically just saying, oh, this is going to go down today and I'm going to short it to make money to the downside. It's going to fall. Okay. Why is it going to fall? Well, things can fall for many reasons, but not necessarily because the stock is going, other companies going out of business or it's going to fail. Sometimes you do have people that take positions like hedge funds in a company because they think it is going to go much, much, much lower or could fail or go bankrupt or something. I don't trade based on fundamentals. I'm reading praise. I'm reading the gap. That's not the reason that I ever short anything. Okay. But you do have companies that do that, but there's very often an intrinsic problem anyways that's happening with that stock or that company that it's nothing to do with the short position necessarily. It's left itself wide open to a drop-off, a capitulation or whatever you want to call because the company is not doing well for whatever reason. Okay. But it doesn't necessarily mean it's going out of business. It might. Some have. Sometimes things look like they're going out of business and then they get taken over. They get bought or they just stopped trading. So anyways, shorts are going to stay around. They create a healthy market. You may get upset when something falls. Say you are in a long-term position or say you have a 401K and your investment sucks. You may get upset when something falls. If it really upsets you, then first of all, you need to have a plan of action for if something falls or profit taking if you're in swing trades or options trades or even long-term investments. But if you're super young and you're holding for the future, you should still sit down and have a plan of action if it gets to this level or this certain percentage. I may want to get out with profits or whatever the case may be. You have to have all of these things planned out, especially if you're in long-term investments. But again, having selling, having shorting creates a healthier framework for things to move, volume, momentum to come in. I'm going to go back to March of 2020 when we had that just basically just falling off a cliff. I can't even say it was a mountain because a mountain is kind of like you're going up and then you slowly go down. This was just like somebody jumped off a cliff and that's really what the market looked like. A straight, almost completely vertical move down, which was when COVID hit in March of 2020 and everyone panicked because the move happened so fast. But guess what? That's how selling can happen. That's why I like to short, because it can happen quick and fast and big. But as fast as something can go down, as as fast as it can go up and the market had a beautiful recovery then into the drop from the March lows and then again a healthy market created a framework then for people to get into more long positions and therefore things rally and then the market continued and the market made multiple new highs. Again, this was into 2020 and now here we are in 2021. So shorting isn't going to go away. When people talk about it, that tells them they don't understand shorting. They don't understand really what happens with shorting. It's actually healthy for the framework of the market. And again, when an active trader shorts, you're not betting that the company is going to fail, you're not forcing the company to fail. If a company fails, it fails because it's making poor choices, poor management, not making money or any of those other things. And sometimes what happens is hedge funds, before they take a position, they will analyze a company and they will say, we think this company is going to go to this level because of XYZ. Now, again, that could be the upside, could be the downside. But in the case of hedge funds shorting, sometimes that's what happens. And they think it's going to go lower based on certain fundamental reasons. And they are allowed to short. They're allowed to shorten the market. It creates, again, opportunity sometimes for people then to buy a stock at a cheaper price. So there are many, many reasons why shorting is healthy for the market and shorting will continue, will continue to be allowed and will continue because it creates a healthy market. You wouldn't have active markets without it. Again, the market would hardly move. You can't have things just going up forever. It would just be a totally discombobulated market if you wouldn't have short positions. So, and again, going back to the restrictions, there's always been certain restrictions on shorting, at least per se, as individual traders. So that hopefully answers some people's questions about shorting. I will talk more about this at another time. If you're interested in more information or learning how to short, I teach it in the Golden Gap course. You can email me in the list at thestockswish.com. Have a good day.