is there anyway a normal investor can short a stock?

Question

meaning they are NOT a sophisticated investor (making over $200,000 and owning $1,000,000 in assets). thus can't invest in a hedge fund.

Answer 1

Yes; any of the online brokers (etrade, ameritrade, etc) have that option available.

Answer 2

Yes. In order to short a stock you will need to have a margin accout set up with your broker. Margin account requirements and eligibility differ from one broker to another. But the rules of the game are about the same once you have one set up. You select a stock you want to short and ask you broker if it can be shorted (the broker will have to check if the stock is eligible to be shorted and have to see if they can borrow it in order to lend to you - you are selling a stock you basically borrow from someone else). When you sell the stock short, you will be subject to maintannce requirements that your broker has and may be called upon to deposit funds into the account if the position turns against you by a certain amount. Is it risky? Sure. But shorting a stock has several advantages. First, it's a way to actively express an opinion about the direction of the stock as opposed to just no buying a stock. Also, not all stocks have options issued against them so you can;t always buy a put option on a stock as someone has suggested. In addition, shorting a stock may in fact be safer than buying a put option. Sure you downside is unlimited with shorting a stock but in most cased you would be prudent enough not to let you position go exponentially against you (ex. stop orders). Puts expire and in general require a highe level of sophistication to turn into profitabel strategies. In addition, if you think about shorting a stock on a more global scale you will find other advantages as well. Most Wall St firms are hesitant to issue SELL recomendations on stocks as they may have some ionvestment banking relationships with the companies and issuing a SELL recomendation may influnce other relationhsips that the firm has with the company (sure, there shoudl be Chinese walls in place etc but you can't deny the reality). If anythign, they will typically stay away from issuing any recomendation on the company. As you also may know not all investors are elibilge to short stocks (some pension funds, trusts may be prohibited from doing so by their own rules that prohoibit use of borrowing securities). So you end up having an advantage by impkying a strategy that not everyone can use or does in fact use. There are some hedge funds that have made money year after year by shorting stocks. This may be substantially eaasier and better from insittutional trades to short stocks but yes, regfular investors can do so as well and just as succesfully. BUT, study all risks first and understnand if you are competent enough to withstand them. Hope this helps.

Answer 3

You will need enough in your brokerage account to cover your losses if the stock increases dramatically after you short it.

This is very risky and 95 out of 100 times this is attempted, you will lose money. But if you want to hedge a position that you already own, try buying an option to short a stock.

Answer 4

Open an account at a stock brokerage. Find out what the minimum requirements are for shorting - you usually need $5000 to $10,000 in a margin account.

Then pick out the stock you want to short and place the order.

Answer 5

You need about $5000 or so to short stocks. I do not recommend this, a better way is to buy Put Options.

Answer 6

You should be able to call your broker and ask them to short the stock for you.

Answer 7

Yes.