what does it take to short a stock?

Question

my friend told me it takes lots of paperwork and is time-consuming, is that true?

Answer 1

You need a brokerage account that allows you to sell short. You essentially are borrowing the money on short sale, so broker will want some collateral (considered a margin transaction). If you're not approved to short with a brokerage account, you won't be able to do it. Careful, with short sales you're on the hook for unlimited downside. Have you considered buying PUTS?

Answer 2

It dosen't take to long but it is up to your brokerage. Usually you will have to apply for a "margin" account in order to sell stocks short. You will then have to maintain a certain amount of cash in your account depending on the share price and total value of the stock that you sold.

Answer 3

You need a margin account. You also need brokerage approval. If your account balance is great enough, that should not be a problem. As one responder mentioned, puts are an option you should consider. Your risk is limited to the price of the put.

Answer 4

My actual trades are many times just as quick short as they are long (time of execution).

Once you establish a "margin" account, with most brokers you'll be able to short.

But.... that begs the question of whether you should or not. Learn all the rules and dangers of shorting. It's not an amateurs game.

Answer 5

if you have a brokerage account you need to fill out paperwork and be approved to leverage your account. They may look at your credit and you will need to have a specific balance in your account to short