http://profitabletradingtips.com/trading-investing/when-to-short-stocks When to Short Stocks An often effective means of profiting from a falling stock is to short it. Shorting is when a trader sells a stock that he does not own. Essentially he borrows the stock from his stock broker and has to have money in a trading account to cover potential losses. In addition the trader who shorts a stock pays interest on the loan of the stock for the duration of the short. When to short stocks is when you expect the stock to fall in price. When to short stocks is when the trader seeks to leverage his or her trading capital. Shorting stocks is a little like buying options in that the trader enters into a position with a lower capital investment than when he buys a stock and can often gain multiples of the cost of engaging in a short. Unlike options trading, the trader is obligated to buy back the stock at some point in time. Although he can stay in the short position indefinitely, there comes a time when the cost of the position becomes prohibitive. What is a realistic profit when trading stocks by this route? Although profit can be substantial in a well-placed trade, traders are well advised to do diligent technical analysis of the market in order to enter and exit at trade in the most profitable manner. The Problems Related to Borrowing Stock To a degree, when to short stocks is not when you expect there to be a stock split or a dividend payment. Because you have just borrowed the stock you will need to return twice the number of shares after a split and give dividend payments to the brokerage whose stock it still is. And, if the stock price rises greatly, and you do not have sufficient capital in your trading account you may be required to replenish your account or the brokerage may simply sell your shares and expect you to come up with the rest of the cash. Many times a brokerage retains the right to take the stock back (call it away) as when many traders are shorting a stock and the brokerage house only has so many shares to offer.

1. When to Short Stocks
By www.profitabletradingtips.com

2. An often effective means of
profiting from a falling stock is
to short it.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

3. Shorting is when a trader sells
a stock that he does not own.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

4. Essentially he borrows the
stock from his stock broker
and has to have money in a
trading account to cover
potential losses.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

5. In addition the trader who
shorts a stock pays interest on
the loan of the stock for the
duration of the short.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

6. When to short stocks is when
you expect the stock to fall in
price.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

7. When to short stocks is when
the trader seeks to leverage
his or her trading capital.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

8. Shorting stocks is a little like
buying options in that the
trader enters into a position
with a lower
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

9. capital investment than when
he buys a stock and can often
gain multiples of the cost of
engaging in a short.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

10. Unlike options trading, the
trader is obligated to buy back
the stock at some point in
time.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

11. Although he can stay in the
short position indefinitely,
there comes a time when the
cost of the position becomes
prohibitive.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

12. What is a realistic profit when
trading stocks by this route?
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

13. Although profit can be
substantial in a well-placed
trade, traders are well advised
to do diligent technical
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

14. analysis of the market in order
to enter and exit at trade in
the most profitable manner.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

15. The Problems Related to
Borrowing Stock
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

16. To a degree, when to short
stocks is not when you expect
there to be a stock split or a
dividend payment.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

17. Because you have just
borrowed the stock you will
need to return twice the
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

18. number of shares after a split
and give dividend payments to
the brokerage whose stock it
still is.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

19. And, if the stock price rises
greatly, and you do not have
sufficient capital in your
trading
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

20. account you may be required
to replenish your account or
the brokerage may simply sell
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

21. your shares and expect you to
come up with the rest of the
cash.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

22. Many times a brokerage
retains the right to take the
stock back (call it away) as
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

23. when many traders are
shorting a stock and the
brokerage house only has so
many shares to offer.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

24. Profitable Stock Shorting
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

25. Fundamental and technical
stock analyses are the sound
bases of shorting stocks.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

26. When to short stocks is when
the stock is likely to fall in
price, based on market
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

27. fundamentals and accurate
analysis of evolving market
sentiment.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

28. When to short stocks is when
you are scalping in day trading
in an up and down market or
when trend trading and a
stock is heading down.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

29. Traders are wise to set their
stops so that they can retain
profits and avoid losses.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

30. As with most trading, when to
short stocks is when the
market is volatile.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

31. As with most trading, volatile
markets can lead to
substantial profits, but also
substantial losses.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

32. Always do your own
fundamental and technical
analysis when shorting stocks.
http://profitabletradingtips.com/trading-investing/when-to-short-stocks

33. And remember that when you
are uncertain about a trade,
there is nothing to lose by
sitting on your hands until you
understand the market!
http://profitabletradingtips.com/trading-investing/when-to-short-stocks