Part 12 of 12 part Short Story on Short Selling series. Shorting stocks is hard. Discusses the psychology, the hard, demanding, taxing play and the three best short characteristics. Last of the White Top Investor twelve part series on selling short. Knowing of this one especially challenging aspect of the stock market helps new and experienced investors reach a better level of understanding markets. Although shorting stocks is hard, and not for beginners, for their benefit and to best understand the market, they must be aware of it.
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Part 11 of 12 part Short Story on Short Selling series. Short selling analytics and money making insights help both long and short investors gain insight. Analysing short sale data produces useful information. In fact short-selling analytics and money making insights go together. All investors that pay attention to the short selling data can find valuable information. Often it directly applies to money making opportunities. Extracting the right insights from the data increases your money making potential.
Part 10 of 12 part Shot Story on Short Selling series. Part 10 covers four more positives of short selling, Management Accountability, Forced Priority Changes, Contrarian Expressions, Unique Analytics. Short selling attacks produce falling prices and get responses. Forced accountability of both management and boards. Short selling can make new issues a corporate priority and short selling allows expression of contrarian views. Finally, short selling produces unique analytics useful to all investors.
Part 9 of 12 part Short Story on Short Selling series. Part 9 discusses how short selling improves stock markets. Included are 7 ways: Liquidity Increased, Price Discovery Improved, Increases Market Activity, Forces Management Accountability, Prioritizes Corporate Issues, Expresses Contrarian Views, Produces Unique Analytics. It is an important part of the overall investing scene. Short selling brings benefits that help create a healthy and efficient stock market. That benefits all investors, short or long as well as the economy.
Part 8 of 12 part Short Story on Short Selling series. Short selling has rules that apply only to selling short. Financial service providers, the brokers or dealers, stock exchanges and regulators all impose rules on short selling. The primary reason for putting rules in place is to restrict or inhibit extreme, disruptive or manipulative stock price action. All involved want to prevent anyone from imposing any artificial downward market price pressure on the capital markets.
Part 7 of 12 part Short Story on Short Selling series. Unique risks of selling short, Part 7 of the White Top View series on short selling, we discuss unique risks of short selling. Short sellers must cope with all the usual market risks as well as a particular set of additional risks. Only short sellers face these unique risks in the pursuit of profit, including management, dueling news releases, dividend changes, warrants and spinoffs.
Part 6 of 12 part Short Story on Short Selling series. For profit short sellers need: costs, prices and volumes in their favor. Today we discuss prices and costs short sellers need for profitable trades. Experienced short sellers bring a wide field of vision to the market. Each influencing factor must be carefully examined and considered. Then the combined effects of all the factors must be judged before selling short.
Costs and price matter and include transaction costs and fees, selling price realised and finally the buying price paid to close out the short position.
Part 5 of 12 part Short Story on Short Selling series. Short sellers need judgement, vision and timing to be effective and profit. As well, short sellers must have a keen market awareness and a broad vision.
Part 4 of 12 part Short Story on Short Selling series. Experienced short sellers bring a wide field of vision to the market. They carefully examine and consider each influencing factor. Then before taking action they look at the combined effects of all factors. Only after being convinced that the odds have lined up in their favor will they take action and sell a stock short. Today we touch on the first two major factors, market facts and corporate facts.
Part 3 of 12 part Short Story on Short Selling series. Investors that regularly and successfully sell short are knowledgeable and experienced traders. A novice investor can learn how to successfully sell short, but should not start there. A shorting strategy should only be used by experienced and sophisticated investors.