You'll lose it. You owe me forty thousand dollars, so you want to learn how to short, sell and make money from stocks falling off in this video. I'm going to show you the four steps to successfully profit from short selling stocks, and i'm talking about the practical steps, such as finding a prime target in real life. Trash talk about the stock, how to find stock to short on your broker, then executing a short sale and collecting those sweet sweet profits.

Now, are you ready to go on this short selling journey with me today? This is going to be an adventure, but before we go make sure to smash the like button and subscribe, so we can all donate to elon musk's short foundation, all right step, one to short selling, get out of your home office and away from your trading computer. To the real world and find companies you hate in real life. Alright, let's go okay! I know this step might be optional, but it's a great way for us generate short sellers to get out of the house into the real world and do some real life market research. You see this tesla model y.

It's bought from the profit from short selling tesla stock. This is the rivian office. This is supposed to be worth 100 billion dollars at once. Come on.

I've definitely spent a lot of money on the starbucks drinks, but not the stock. Let's be real here. Sometimes their coffee tastes, like my grandmother's diarrhea. To be honest, i think i've spent more money on these lululemon pants.

They have made money trading the stock check out these sick cars behind me and the nice t-shirts. This is really really nice, oh wait, but the glass is dirty. This is why you got ta short. The stock you'll lose it.

You owe me forty thousand dollars. Okay, now that we've selected our targets in real life, it's time for step, number two find shares to short on your broker, all right now, it's time to short, sell. Okay! Now that we're back at our trading computer, it's time to find stocks. To short, remember in our last video called short selling for beginners, i explained that to short a stock, you must first borrow the shares to short from your broker.

Essentially, you are borrowing something you don't own to sell to someone else. First. This is the weird business of short selling and don't worry, let me show you the technical steps now when short selling stocks, your target you'll lose. It generally fall under two categories: easy to borrow stocks, which is often abbreviated as etb and hard to borrow stocks htb and the process of finding shares to short and executing a short sale on these.

Two categories could be quite different, and these stock shares you want to borrow from your broker, are called short, locates borrows or shares to borrow. They all mean the same thing, let's start with the easy to borrow stocks. First, if a stock is easy to borrow, it means they are free to borrow from your broker, you pay zero dollars to loan the shares to short a stock. So, for example, i could short tesla, starbucks or even merging stock for free intraday, and obviously this is great to see.

Generally speaking, large cap stocks are often free to borrow. You can find whether a stock is easy to borrow or not. On your montage window, you'll see this s sign besides your ticker symbol for most of the platforms. That means the stock is etb and you can short sell these stocks for free now.

Moving on to step number three executing the short sale on your broker platform, and let me demonstrate the short sale on one of my platforms here: xero pro by trade, zero go to your montage window, select the number of shares you want to short and then click Short to execute the short sale as demonstration purposes here, i shorted 1 000 shares of this stock at 8.42. It's a very similar setup on my other broker platforms as well. This is interactive brokers connected to dash trader pro. I often select the stock to short and then number of shares and then click sell to execute the short sale.

Okay, so the process of step number two: finding stocks to should sell and step number three executing the short seems pretty straightforward for easy to borrow stocks right now we got ta talk about shorting the hard to borrow stocks. There's a lot more consideration needed when it comes to shorting these ones that you must be aware of. If you watched this video so far and enjoyed this kind of presentation breaking down the steps of short selling and locating stocks. To short, then, please remember to hit the like button and let me know in the comment section below, if you want me to film more fun and educational videos like these in the future.

Okay, back too hard to borrow socks, i mean it's in the name. After all hard to borrow stocks, that means it's going to cost you extra extra money, usually when a stock is not easy to borrow. That means it's more difficult for the brokers to find those shares to short. Think about you know, pump and dump penny stocks or during the wall street bets movement when gamestop went all the way to 500, when a stock price is obviously too high, and it's very likely to come back down to earth.

That's when a stock becomes hard to borrow, because the demand to short a stock is high and often these stocks have lower shares counts, so the supply to shoot them is limited hard to borrow stocks are hard to find and they cost a lot more money to Locate when the stock is htb, you won't be able to see the s symbol on your montage like this stock right here you can see that it's a lower float small cap penny stock. You can see it went to a high of seven dollars from two dollars. Just a couple days ago, it's very likely going back down to earth shares. Float is only about 20 million shares, so limited shares available out there in the market for sure - and you would often see this with other small cap penny stock pump and dump stocks.

They are generally all hard to borrow, so that means you need to pay in order to locate them to short in order to get these hard to borrow stocks. To short, you need to be using brokers that have an extensive inventory of stocks. To short, for example, trade, 0, cobra trading or center point securities, let me show you what that looks like on my platform right now, so this is a platform xero pro by trade, zero to locate a hard to borrow stock to short. First, you need to go to the short locate window here, type in a symbol, and now we need to press enter to look up the cost to borrow these stocks.

Now, if i'm okay with the cost - and i want the locate - then i just click - ok and there you go. You can see that these locates are available in your short inventory. Trade. Zero is by far one of the best when it comes to hard to borrow stocks inventory, especially if you're having accounts under thirty thousand dollars and a lot of times.

They have shares to short on certain extremely hard to borrow stocks that i really couldn't find anywhere else and they've recently come back to canada. I know in canada there's limited broker options so i'm very happy to see trade zero back in canada, they're also available in the u.s and other countries as well. Now, let's do the same process at my cobra trading platform now and see what that looks like you can see to go: locate a stock go to the short locate window type in the symbols you're looking for and the number of shares and click inquire to see. The cost and if you're, okay with the cost, then click locate order and that's it.

So all these brokers, i just mentioned trade, zero, cobra and centerpoint. They are the best brokers when it comes to short selling, and hopefully this answers. Many of the frequently asked questions. I get about which brokers to use for short selling, i've account with all of them, and i personally use them to short, sell stocks again.

If you have a small account under thirty thousand dollars or if you're in canada, then trade zero is your best choice when it comes to shorting hard to borrow stocks, i'm working with them to get a deal for you guys to get one month of 10 off On your locate fees and three months of free platform, which is xero pro, the link to sign up is in the description below if you're, interested, cobra trading and center point are great for accounts over thirty thousand dollars. However, they're not available for canadians you'll still get some discounts. If you sign up through my link down below too, i would only recommend brokers. I personally use - and these are all great choices - the three short selling brokers.

They all have a lot of easy to borrow large cap stocks same as interactive brokers. Now it's time for step, number four: finding cost efficient ways to spend on locate. Okay. So now we learned how to find stocks short and the best brokers.

To short, now, let's talk a little bit more about the cost of locating stocks. Well, yes, paying for locates is part of the business. It's all a business expense that can be used to write off against your trading profits. There's still definitely some smarter ways to decide whether you want to short a stock or not, because when i first got my hands on one of these short selling brokers, i went ham and located way too much and spends way too much money on locate fees.

So i want to offer you some tips when it comes to deciding how much and when to spend money on locates first tip i have, for you is the 1 rule. Generally speaking, a locate cost should not be more than one percent of the stock price. For example, a five dollar small cap stock should not cost more than five cents per share to locate. Ideally, they should cost around one cent or two cents or if they really cost more than one percent, which is more than five cents, then they better be able to give you a lot more range to the downside.

Let me show you what i mean in just a little bit. Another example here is the stock dewac, since it's about 40 to 50 dollars. This stock should not cost you more than four to five dollars to short for sure. In fact, they cost about two cents.

On trade zero, so that's very, very cheap, okay! So now we know about the one percent rule, but what if the stock actually cost more than one percent to locate like we mentioned earlier? If that's the case, then you need to determine the potential downside for the stock to make sure it's worth it. If a stock is going to cost me, one dollar to locate for 1 000 shares. That's one thousand dollars of locate cost. Then you better be able to give me a one to four risk reward or even greater meaning that i want to look at a chart for the stock and see that the short set up on this stock can tank more than four dollars to a downside.

To make sure my cost on the locate is worth it, so i want to spend a thousand dollars to potentially make four thousand dollars. Remember. Paying for locate is all business expenses in trading, especially short selling. You need to be able to spend money to make even more money, especially on these golden opportunities.

If you want to learn more about my short selling strategies or risk management, then feel free to check out the humble trader community in the link below. Thank you guys. So much for watching as always, i'm the humble trader and i'll see you guys next time.