It’s the brokerage firm that the client is trading with not another client

Aug 23, 2019
11:11:52pm

Jersey hunter All-American

They must have the shares on account in order to accept the short trade. It’s still buy low and sell high but the order is reversed.

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Jersey hunter

Bio page: Jersey hunter
Joined: Mar 24, 2012
Last login: Apr 15, 2024
Total posts: 7,022 (78 FO)

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Messages

Author

Time

Hey finance guys. Question about shorting a stock

NacoCoug

8/23/19 10:59pm

Instead of initiating with a buy, you initiate with a sell. Then you have to

RyneK

8/23/19 11:02pm

Feels like a hack

NacoCoug

8/23/19 11:08pm

The securities lending market is a separate market

Coog4Life

8/23/19 11:11pm

<< Deleted >>

RyneK

8/23/19 11:13pm

So does the borrower ever pay the price for the stock or just the interest on

NacoCoug

8/23/19 11:17pm

Wait, what I said doesnt make sense. Is it that they give the cash for the stock

NacoCoug

8/23/19 11:21pm

correct

Coog4Life

8/23/19 11:25pm

So shorting has come from institutions needing cash?

NacoCoug

8/23/19 11:36pm

no, these are distinct markets

Coog4Life

8/23/19 11:50pm

You mean not all that borrow are shorting?

NacoCoug

8/23/19 11:53pm

correct

Coog4Life

8/23/19 11:53pm

It’s the brokerage firm that the client is trading with not another client

Jersey hunter

8/23/19 11:11pm

Uh...no

KSwiss

8/24/19 1:26am

You borrow the shares from your broker's inventory, quick as buying long. It has

MatthiasG

8/24/19 12:00am

Easy way to understand it, you're buying low, selling high, just doing it in

MatthiasG

8/24/19 12:07am

Dumb it down more. Use a stock for the example. Like FB.

timponyloco

8/24/19 3:43am

There’s plenty of that already, knock yerself out

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