How do you short a stock when you don't even own the stock to start with? Look at details?

Question

Is it possible to short a stock with any online brokers, for instance, scott trader or td ameritrade?

Answer 1

Yes. You need to open a margin account and fill out an application that will allow you to short stocks.

Answer 2

No, you cannot short a stock unless you have whats called "margin ability" That is credit with a brokerage house such as Schwab or Ameritrade, or Scott trader ect.

Margin is simply credit Then you can set up to short stocks. Simply meaning you sell a stock you do not own. Then at some later day buy that same stock and pay back the account. Hopefully the stock will drop in price and you will be able to make the difference in $$ that go into your pocket.

Answer 3

Yes - any brokerage firm (online or otherwise) will do. To short a stock you will need to open a margin account. In a margin account, you are able to borrow more than you have to purchase stock, but you are also able to borrow stock and then sell it. You can't use the money (it's put into what is known as "type 5" - regular margin is "type 2") until you buy the stock back. If you don't have enough to have a margin account ($2000), you can consider playing with options - a "Put" option increases in price when the stock goes down, but only costs a fraction to control 100 shares!

However, whatever you do, please do your "due diligence" before investing - I've seen many a great one fall big time.

Answer 4

That's the definition of shorting a stock. Selling what you don't own.
You are in fact borrowing the stock from someone else.
Yes on-line brokers will allow you to short stocks if you have the right type of account and sufficient funds.