shorting stocks explanation about?

Answer 1

It is just the same as buying stocks with 3 important differences. 1. you have to have a margin account. 2. whereas when you buy a stock all you can possibly loose is the amount of your purchase, when you short a stock the sky is the limit. 3. If the stock is a dividend paying stock you have to pay the dividend.

Note: stocks very very seldomly rise very rapidly, but they can tank over night. One of the advantage of shorting.

Answer 2

The idea of shorting stocks is to borrow someone's stock for a determined amount of time and then replace it later for market value. An example: today you borrow 100 shares of IBM stock with a value of $10 per share, you sell the stock and put $1000 in your account. Lets say 30 days from now you have agreed to repurchase the stock and the price has declined to $8.50 a share, you spend $850 replacing the stock for a $150 profit. I have simplified it quite a bit, there a rules covering when you are actually allowed to short a stock.

Answer 3

Shorting stock involves selling borrowed shares of stock, and buying new shares of stock to replace those borrowed. Stocks are shorted by people betting that a companies stock will go down. An example is that you borrow a share of stock and sell it on the market for $100, then buy a share of the same stock to replace the borrowed one at $50. You pocket the difference so long as the price of the stock decreases (and you have to pay the difference if you bet wrong and the stock price goes up).

Answer 4

shorting a stock is the opposite of going long a stock. You short a stock by selling it short. This makes a broker sell a long margined position and then you must buy the stock back at some point to give that stock back to the long holder. You are betting a stock will drop in price and only make money if the stock drops. You have unlimited loss potential , where a long can only lose 100%

Answer 5

Short selling stock consists of the following:

* An investor borrows shares, but since there is a general rule in the United States that one must only borrow money based on shares up to 50 percent of the shares' value, one must deposit 50 percent of the value of the shares in cash with one's brokerage firm.
* The investor sells them and the proceeds are credited to his account at the brokerage firm.
* The investor must "close" the position by buying back the shares (called covering) - If the price drops, he makes a profit. Otherwise he makes a loss.
* The investor finally returns the shares to the lender.

Answer 6

did no longer study your essay, whether the international as all of us be attentive to it particularly is going to likely be diverse as all our get entry to point jobs are being outsourced to international locations including India. subsequently, the subsequent technology should not be waiting to pass into the artwork rigidity till they have achieved a uni direction, which will all be full of those Indians who're making a residing from OUR agencies, because it is regular by skill of all of us that the U. S., uk and Aust and different international locations whose jobs have been outsourced, have the main suitable uni's - subsequently extra opposition to get into uni and subsequently plenty extra stable to get a sturdy paying interest.

Answer 7

i don't know