When is it appropriate to sell short a stock when you don't own it to buy it back at a lower price?

Answers:2   |   LastUpdateAt:2012-10-07 03:41:02  

Asked at 2012-08-06 13:39:46
I am new to this market and trade. It seems that with the instant news that I am at a great disadvantage with respect to upswings occurring at moments in time and are gone until the next time I do not understand the news fast enough to work and most of the market decreases in daily as I see it. I think I am better and have better odds of picking losers I winners. So if you want to make money, seems I have to sell short , which is actually buying it , because I have to spend money to sell short because borrowed shares at a price to another investor , right ... and then buy when people have enough of a fall that can make the money back on the road. Is there a time limit on short selling that is before you have to buy the shares back or is it indefinite ? For example, I think the shares will go underneath a bathroom insurance, can I can wait until I think the population is in decline is lower ?
Answer1KingsleyAnswered at 2012-09-12 08:00:06
It is appropriate only when it has the resources to buy the shares at a higher price ( potentially much higher , if you are very bad ) and return them to their rightful owner .. in the event that the price goes up . Time limit? I do not think so , unless the owner decides to sell real and calls you back what you borrowed so that they can sell normally. If you make that request and the stock price is high ... You have to buy shares to return to him . ( Them. ) MedlinePlus MedlinePlus I think this is where the term " put you " comes from . Puts and calls .
MedlinePlus You borrow a deposit of $ 10 and sell it . You have $ 10. MedlinePlus MedlinePlus If : Stock remains at $ 10 and the lender wants your back , you buy a stock and return to it .. 're only transaction costs . MedlinePlus MedlinePlus Si: low to $ 7 ... you buy shares in order to return them to the owner ( at a time of your choice) . You borrow $ 10 and returned $ 7, making $ 3 ... and the lender " does not care " , since it was still his property ( an action) who borrowed and returned. MedlinePlus MedlinePlus If : Stock going to $ 30 .... Lender calls you and says, "I want my actions . 'm Selling " must buy shares to return ... paying $ 30 for what was paid $ 10. You lose $ 20 per share . Has "put it in your case. "
MedlinePlus Buying and selling options is similar , but has a stated maturity . If the option expires before exercising ... it is gone forever.
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