Editing Talk:2094: Short Selling

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::::If you think short-selling shouldn't be legal, you should look into {{w|Quantitative easing}} and {{w|Fractional-reserve banking}}. -- [[User:Hkmaly|Hkmaly]] ([[User talk:Hkmaly|talk]]) 18:16, 5 January 2019 (UTC)
 
::::If you think short-selling shouldn't be legal, you should look into {{w|Quantitative easing}} and {{w|Fractional-reserve banking}}. -- [[User:Hkmaly|Hkmaly]] ([[User talk:Hkmaly|talk]]) 18:16, 5 January 2019 (UTC)
 
:::What you (and Ponytail, FWIW, given how muddled the analogy is of course) describe sounds more like selling put options than short selling. [[User:Stannius|Stannius]] ([[User talk:Stannius|talk]]) 19:10, 4 January 2019 (UTC)
 
:::What you (and Ponytail, FWIW, given how muddled the analogy is of course) describe sounds more like selling put options than short selling. [[User:Stannius|Stannius]] ([[User talk:Stannius|talk]]) 19:10, 4 January 2019 (UTC)
:::You don't actually buy the shares beforehand. What happens is that if you think a stock is overvalued, you can borrow some shares of it from a broker and sell them at the current price. You then owe the broker those shares that you hope to repay by purchasing it at a lower price in the future, but if the stock instead goes up, you may be squeezed into shelling out money for the higher price. Why is this useful to the market? I recommend reading <cite>The Blind Side</cite> for a good example. Market prices tell us a lot of information about what a great deal of people think about the value of things. This information is a lot more accurate when those who think something is overvalued have as much of a say as those who think it's undervalued. Asset bubbles would happen a lot more often otherwise. [[User:PerfectlyGoodInk|PerfectlyGoodInk]] ([[User talk:PerfectlyGoodInk|talk]]) 18:50, 7 January 2019 (UTC)
 
 
::It is not that hard to understand. Imagine you own 100 apple-shares and do not plan to sell them for the near future. You lend me these 100-shares for 2 weeks. I sell the 100 shares immediately. Now I have 2 weeks to re-buy them. If I’m lucky the price for these 100 shares will decrease somewhen during this 2 weeks. Imaging that I sold the shares for 200$ each, and could re-buy them for 170$: Then I made 30*100$=3000$. Of course you will get a fee for the borrowing. The 3000$-fee are my profit.
 
::It is not that hard to understand. Imagine you own 100 apple-shares and do not plan to sell them for the near future. You lend me these 100-shares for 2 weeks. I sell the 100 shares immediately. Now I have 2 weeks to re-buy them. If I’m lucky the price for these 100 shares will decrease somewhen during this 2 weeks. Imaging that I sold the shares for 200$ each, and could re-buy them for 170$: Then I made 30*100$=3000$. Of course you will get a fee for the borrowing. The 3000$-fee are my profit.
 
::The risk here is of course that the shares could increase in price during the 2 weeks – then I would be forced to rebuy them for more that I got AND have to pay you the fee. That’s the reason shorts are more dangerous then longs. --[[User:DaB.|DaB.]] ([[User talk:DaB.|talk]]) 17:36, 4 January 2019 (UTC)
 
::The risk here is of course that the shares could increase in price during the 2 weeks – then I would be forced to rebuy them for more that I got AND have to pay you the fee. That’s the reason shorts are more dangerous then longs. --[[User:DaB.|DaB.]] ([[User talk:DaB.|talk]]) 17:36, 4 January 2019 (UTC)

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