Editing Talk:2094: Short Selling
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::::It’s totally legal to sell something that you borrow. If I could not buy it back you and I will have a problem – so you do this kind of business only with people/firms with money. | ::::It’s totally legal to sell something that you borrow. If I could not buy it back you and I will have a problem – so you do this kind of business only with people/firms with money. | ||
::::But to show you something that IS crazy, there is also ''Naked short selling'' – that’s like short-selling on speed. With this kind of short-selling, I do not borrow anything. It works in this way: Today I sell you 100 apple-shares, which I do not have, for 200$. You have to pay me immediately, so I collect 100*200$=20,000$. I will deliver these shares when I have to, which is 1 or 2 days from now (depending on the market-place). So if I’m lucky and the price drops the next 1 or 2 days, then I make profit. For example if the apple-shares decrease again to 170$, then I make 100*(200$-170$)=3000$ profit. Some countries (but not the US AFAIK) forbid these kind of short-selling, after the last financial crisis. --[[User:DaB.|DaB.]] ([[User talk:DaB.|talk]]) 20:37, 4 January 2019 (UTC) | ::::But to show you something that IS crazy, there is also ''Naked short selling'' – that’s like short-selling on speed. With this kind of short-selling, I do not borrow anything. It works in this way: Today I sell you 100 apple-shares, which I do not have, for 200$. You have to pay me immediately, so I collect 100*200$=20,000$. I will deliver these shares when I have to, which is 1 or 2 days from now (depending on the market-place). So if I’m lucky and the price drops the next 1 or 2 days, then I make profit. For example if the apple-shares decrease again to 170$, then I make 100*(200$-170$)=3000$ profit. Some countries (but not the US AFAIK) forbid these kind of short-selling, after the last financial crisis. --[[User:DaB.|DaB.]] ([[User talk:DaB.|talk]]) 20:37, 4 January 2019 (UTC) | ||
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Short selling doesn't seem all that complicated. It's the night before black friday, and your friend has [hot new amazing toy] that they picked up a few months ago before it got popular. You ask if you can borrow it for a week. Then you go out the next morning and scalp it to a frustrated parent that is desperate to get it for their kid but the store is sold out. A week goes by, and you head to the store and pick one up now that they are back in stock and on sale, and give it back to your friend. Your friend has a toy, even if it's not exactly the same one, and the price difference between what you sold it for and what you paid for the new one gave you a bit of holiday spending money. The danger is if the toy doesn't get back in stock or the price goes up due to demand and you have to buy it for more than you sold it. [[User:Andyd273|Andyd273]] ([[User talk:Andyd273|talk]]) 17:45, 4 January 2019 (UTC) | Short selling doesn't seem all that complicated. It's the night before black friday, and your friend has [hot new amazing toy] that they picked up a few months ago before it got popular. You ask if you can borrow it for a week. Then you go out the next morning and scalp it to a frustrated parent that is desperate to get it for their kid but the store is sold out. A week goes by, and you head to the store and pick one up now that they are back in stock and on sale, and give it back to your friend. Your friend has a toy, even if it's not exactly the same one, and the price difference between what you sold it for and what you paid for the new one gave you a bit of holiday spending money. The danger is if the toy doesn't get back in stock or the price goes up due to demand and you have to buy it for more than you sold it. [[User:Andyd273|Andyd273]] ([[User talk:Andyd273|talk]]) 17:45, 4 January 2019 (UTC) |