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When someone is short in a stock what does this mean??
Heres a example-- There have been 3 mil short since Nov 2005, at current avg volume (295.000) it's 10 days to cover, The first 2 mil shares got in at about 6.50 avg so they've got some room to cover.

2007-01-26 14:37:37 · 3 answers · asked by jon a 1 in Business & Finance Investing

3 answers

When trading stocks, bonds or tulip bulbs you need a buy and a sell. It does not matter what order you execute this in. A buy and a sell result in a zero sum. If you buy first you are "long". You do not actually take possesion of anything, it is only a paper position. Once you sell, your net position is 0.
Likewise, if you sell first you become "short". You theoretically borrow the shares you are short. Once you buy you net position is again 0.
In both cases the ideal scenario is to buy low and sell high. Or better yet to buy high and sell higher!
The opposite is also true. If you believe that the market you are trading is going to drop then you sell first, hoping to buy back at a lower price.

2007-01-26 17:03:11 · answer #1 · answered by Scott O 3 · 0 0

Selling a stock short is something you can do if you expect a stock's price to go down. You might borrow a friend's 100 shares of stock, sell them for $48/share, wait for the price to go down, and then buy another 100 at $24/share. Your friend gets the same number of shares back. They are not happy about the plunge in price, but you've just made $2400.

The statistics you cite are an attempt to measure the extent to which this is going on with a company's stock (though not borrowed from friends). It's an indication that some members of the public may think the stock is currently overvalued.

2007-01-26 14:52:11 · answer #2 · answered by Beckee 7 · 1 0

There are so many stock brokers, Just you will have to find it in the search engine, and you will find many good brokers.

2016-05-24 04:05:54 · answer #3 · answered by Cheryl 4 · 0 0

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