If you’re gonna short sell low-priced stocks, there’s a LOT you need to know first. It can be a highly profitable niche ... IF you understand the limitations and really take the time to master this strategy.
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Let’s start with some of the limitations of short selling ... Have you ever tried to short a stock, but the order was rejected? First, you need to have a margin account to short stocks — for every broker. A cash account is a great tool, but you can’t short with one.
If you have a cash account, contact your broker about margin accounts.
Now, one of the biggest pains with short selling is actually borrowing the shares. Remember, you’re selling something you don’t own, so you have to borrow it. And you borrow the shares you’re going to short from your broker.
Once you have the right to short those shares, you enter the order and take a negative position. Unfortunately, especially in low-priced and volatile stocks, your broker simply may not have shares for you to borrow.
And it may or may not be your broker's fault...
Many brokers simply don’t want you to short these stocks. So they won't even try to get the shares. Why? It's a risky strategy — especially if you have a small account and are new to trading. They view it as basically handing you a loaded gun, and they don’t want to do that.
Now, obviously you can lose money buying stocks, but going short leaves huge potential for massive losses. I’m sure you’ve heard the horror stories of blown-up accounts. If you're short, a stock could go up 100%–300% or more. So your losses can be staggering. But if you're long, the stock can only go to zero.
Make sure you fully understand how to short. Know how to approach it and stick to your risk-management plan!
#StocksToTrade #ShortSell #StockMarket
*Tim Bohen teaches skills others have used to make money. Most who receive free or paid content will make little or no money because they will not apply the skills being taught. Any results displayed may be exceptional. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable.
You can lose money trading stocks. Do not invest money you cannot afford to lose. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services.
🔴 Subscribe for more free Stock Trading tips: YouTube.com/StocksToTrade
Share this video with a fellow Trader: https://youtu.be/Fopj5b4fBa8
✅ Links we mention and recommend:
Try StocksToTrade for $7: https://stockstotrade.com/14daytrial/
Get our FREE weekly watchlist here: https://stockstotrade.com/watchlist
Check out the SteadyTrade podcast: https://steadytrade.com
✅ Recommended video: https://youtu.be/iairxsUBKs4
✅ Recommended playlists:
Stock Trading 101: A Day Trader's Guide: https://www.youtube.com/watch?v=G_v3GMkKCjk&list=PLWWz2BSabm3bG64ohfJ-CnnVTjLCWwvei
Advanced Stock Trading Tips: https://www.youtube.com/watch?v=OXLs_-PgMUk&list=PLWWz2BSabm3YCZdk7ocrBXGJaLVXXFUYb
StocksToTrade Software Tips and Tricks: https://www.youtube.com/watch?v=jiTi-chHNyo&list=PLWWz2BSabm3ay_lvQC9JN_1niB78bI7ga
Weekly Trading Recap Videos: https://www.youtube.com/watch?v=_n0XaDt1XFY&list=PLWWz2BSabm3b3-4DcEx98TzNPLAKcq6ES
✅ Follow StocksToTrade on social media:
Instagram: https://www.instagram.com/stockstotrade/
Facebook: https://www.facebook.com/StocksToTrade/
Twitter: https://twitter.com/StocksToTrade
Let’s start with some of the limitations of short selling ... Have you ever tried to short a stock, but the order was rejected? First, you need to have a margin account to short stocks — for every broker. A cash account is a great tool, but you can’t short with one.
If you have a cash account, contact your broker about margin accounts.
Now, one of the biggest pains with short selling is actually borrowing the shares. Remember, you’re selling something you don’t own, so you have to borrow it. And you borrow the shares you’re going to short from your broker.
Once you have the right to short those shares, you enter the order and take a negative position. Unfortunately, especially in low-priced and volatile stocks, your broker simply may not have shares for you to borrow.
And it may or may not be your broker's fault...
Many brokers simply don’t want you to short these stocks. So they won't even try to get the shares. Why? It's a risky strategy — especially if you have a small account and are new to trading. They view it as basically handing you a loaded gun, and they don’t want to do that.
Now, obviously you can lose money buying stocks, but going short leaves huge potential for massive losses. I’m sure you’ve heard the horror stories of blown-up accounts. If you're short, a stock could go up 100%–300% or more. So your losses can be staggering. But if you're long, the stock can only go to zero.
Make sure you fully understand how to short. Know how to approach it and stick to your risk-management plan!
#StocksToTrade #ShortSell #StockMarket
*Tim Bohen teaches skills others have used to make money. Most who receive free or paid content will make little or no money because they will not apply the skills being taught. Any results displayed may be exceptional. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable.
You can lose money trading stocks. Do not invest money you cannot afford to lose. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services.
What a smart and eloquent guy! Thanks so much for the video!
Just BS…too much talking, gotta do better bruh…
Shirt to tight lol
Gave you a like. Is shorting a stock only done in blocks of 100 like options? Why?
Video does not deliver as the title says. Disappointing.
Everyone can't succeed because where there's a winner, there's a loser lol
One thing to point out … if you are a noob or a little fish with a cash account, you can absolutely capture a bearish position buy selling call credit spreads. They still carry risk but they do limit risk up front when you open the position. The downside to shorting with options is a capped return on the position unless you start rolling… food for thought 👍
Great video. Right to the point and packed full of information. Thank you
I've not shorted yet. but I've been bitten by short sellers on my long picks.
Ty, Ty, Ty……….
why short and have all the cost and risk? when you could simply just buy puts? of course the stock needs to be "otionable" but for new traders early in their journey selling short makes no sense for them to do.
I ought to sell my portfolio strategy! If peeps did the opposite they'd make bank;)
Great video! I have a question though. Lets say.. I have 100 shares of XYZ stock at 10 dollars a share. Lets say I think the price is going to drop so I sell my entire holdings at 10 and rebuy it at 5 dollars. And keep repeating that process as the stock goes up. Isn’t this technically shorting?
I've definitely shorted stocks many times and yes Ie been rejected from shorting great setups its a pain but many stocks or HTB. i have my own watchlist of ETB stocks i like to short if its in my favor;-)
Is this what the hedge funds do to gamestop?
High risk for relatively low reward. Not worth it, IMO.
Am I missing something or did this video not tell you anything about shorting stocks the smart way and instead told you about the risks involved in shorting stocks?
Great video I have learned a lot from the break down.
Step one for shorting – don't.
Thank you for coming to my TED Talk.
Please Answer! I am trying to find a broker to short hard to borrow shares overnight my current broker has x5 fees for the first night what has x2 or less???
Margin account sucks cash account sucks unless you don’t have money
Not yet, but I want to
Love your videos man can't wait to join the team, gotta get my bread a little more tho 😅 i actually was trying to buy a put option and made a mistake and short sold a put option and the mf rocketed. I was so confused as to why I was making money and the stock was rising. And that's how I learned to short stocks accidently making a 236 bucks lmao
What a likable guy and presentation. I’ve always stayed away from shorting from lack of knowledge but as with all things in trading, it’s baby steps to learning. Start small, get the rhythm of the trades and you’ll be shorting in no time.
Today I shorted myself on a bank stock I’m holding given the 800+ DOW correction on 9/3/20 and it was quite profitable and I simply reassigned the lot since I’m FIFO with the broker. But pure shorting is another animal to wrestle. I’m ready to learn more so it’s no so scary and a welcomed opportunity.
When you short a stock how do you know how much you will be paying to borrow that stock when day trading?
Will shorting a stock count in the volume count?
Im a newbie and will definitely not be shorting stocks anytime soon. Very useful information. Thanks!
Not easy to short, as hard to borrow when stocks are moving fast.
E*TRADE really let me down on denying me a short on my margin account on a Nasdaq stock with a decent float size. What trading platform would you recommend as I short 2x to every long in $1 to $10 stocks
Have you shorted a stock? How have you done?