How Short Selling Works




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47 Comments

  1. What you didn’t mention is that the people in The Big Short made many millions of dollars off the suffering of millions of people that lost their houses. It’s morally very questionable. It would be like betting the over on how many Jews Hitler could kill if the over/under was 5 million, and then celebrating when he killed 6 million.

  2. long position: buy low sell high, capital gain means profit. what about short selling? if i short 1000 stock at price usd 50, then a week later the price become usd 10. should i buy 1000 stock at price usd 10, so i can gain its profit? thank you

  3. Stop ur BUULSHIT!!! I. Don’t feel like go into details but Shorting ir by far beats Long & it straight a psychological patterns and behaviors that’s involved…. Ffff ouutta here

  4. Confusing explanation.
    On the short side you buy an opportunity to theoretically return let's say
    100stocks = worth $10 =$1000 you're not "borrowing" or trade anything.
    If a stock price goes down by $5
    you have to "return" 100 stocks worth only 50% so your return would be $500, hence 100% of the 50% margin makes 100% return.
    If the stock goes $5 up your loss would be 200% relative to your $500 margin,
    but Margin call will be triggered by around 70-80% or in absolute numbers at around $1200-$1300 of the initial stock price or even earlier.
    The only explanation my logic generates.

  5. This was a very informative video. I very much enjoyed listening to his words. I would suggest that the presenter try to reduce arm and hand gestures so as to be less distracting.

  6. I was considering this but after his warnings I'm thinking I'll stick with Bitcoin. No matter what you still make money when it goes up and down if you watch close enough

  7. I just wanna make sure Im getting this. The short investor, borrows 1000 shares of a stock at $10/per share and immediately sells it for $10000. The stock drops to $5/share and the investor buys back 1000 shares at the total cost of $5000. Meaning he returns the 1000 shares to the broker and nets $5000? The part at 2:44 where it shows $15000 for the short investor is throwing me off a little bit, because it sounds like it wouldn't be $15000, but instead $10000 (including the initial margin). So I must be missing something.

  8. Sounds scary, but of course any trade does when you don’t use a stop loss. You should never, ever be in a position to lose "an infinite amount of money" on a short.

  9. SHORT SELLERS WILL LOSE LOTS LOTS OF $$$! Investors believe market will keep going down. They SELL & start SHORTING STOCKS, Smart money will SQUEEZE those brainless, get their $$. SQUEEZE THEM LIKE GAMESTOP!!!

  10. Can you explain how much the loss would be if I set a stop loss at $X and take a position at $Y? in other words, if the stock price exceeds the stop loss set in the position. thank you.

  11. I have no clue why the hell anybody would sell a stock short when you can simply get a put option instead which accomplishes the exact same thing to the upside without the crazy unlimited risk or margin regulations to the downside.

  12. Very good explanation. One question that remains for me though is once the short seller sells the stock to the long investor do the proceeds have to sit in their account along with their margin until they replace the stock later?

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