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When to Short Stocks




By www.profitabletradingtips.com
An often effective means of
profiting from a falling stock is
           to short it.



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



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



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



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




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



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



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



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




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



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



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



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


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



   http://profitabletradingtips.com/trading-investing/when-to-short-stocks
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

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When to Short Stocks

  • 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
  • 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