What is Short Selling?

http://www.davegagneblog.com - I explain what short selling is and how it works. Using my incredible drawing skills (ya right!) Why you need to play both sides of the market? Visit my blog and get my money management calculator FREE.

Comments

1. I learned everything I needed to know about short selling by watching the great Canadian drama series, Traders.
2. Am I right in saying, you don't need no money to lend of the broker?
3. is there free software that i can use to download and view current industry stock?
4. im new to shorting. how do they actually 'lend' the stock to you? I mean, do you have to know someone in the biz or can you, say, do that with a big brokerage house like Merrill edge ? sorry for the dumb question
5. Can you to a video on straddles?
6. very great explanation! I finally understand!!
7. i dont have a broker, do i need a broker for that? or does that also work online??
8. very well explained. Thanks Dave.
9. brokerage house only pian owen brokerage invester lossing money
10. Well I don't want to short sell or buy then, this sounds stressful and dangerous
11. I finally learned what short selling is thanks and definitely added you to my favorite list.
12. very nice seeling would love to have you as a team member at pennyagent.com
13. Is their a time limit for when you have you buy back?
14. Here is my question Mr. Gagne, if person A wants to short sell his stocks, why would person B wants to buy if both of them wanted to make money?
15. Hi. I have no knowledge about all this. Found ure video becuz I wanted to understand the movie (The Big Short). One hellava movie I'd say :) Anyway, my question is... if the gamble goes my way... this means that the buyer will be at a loss... right?
    
    Becuz I borrow the stocks from the broker, and sell them at the current price to the buyer (who ever that may be).
    Say 1,000 stocks at $10-each. So, basically, now I get $10,000.
    
    In 1-year, the price plummets!!! say to $1 per pop.
    Now, I buy all the 1,000 stocks form the initial buyer whom I sold it to.
    I only pay $1,000 - meaning my profit is $9,000.
    
    The initial buyer tho, who bought them from me, already paid 10,000
    And now, since the price after 1-year is only $1,000 for the shares... in total he
    lost $10,000?
    
    Plz be gentle in case I made a mistake. I only knew about these things after watching the movie. LOL!
    Thanks in advance :D
16. so tim sykes says he made his fortune short selling penny stocks and youre saying that you cannot short sell penny stocks????
17. So it basically has the same principle of a consignment sale
18. Haha, I like the drawing and the 80s retro intro music :D
19. wow. Been trading for like 3 days and missed out on what i thought were good short opportunities because logically, i always thought " how the f*** do you go short (sell) when you have nothing to sell?" lol..makes sense now.
20. So are you responsible for finding a buyer or is your brokerage who lent you the shares responsible?