Selling short

Discussion in 'eInvesting Feedback' started by Monte, Jun 12, 2007.

  1. Monte

    Monte New Member Original Member

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    Is it possible in this game? If no, then it should be.
     
  2. JRW-910

    JRW-910 Administrator Staff Member Moderator

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    Not at this time... but it is on the list of upgrades that we are working on.


    -JRW
     
  3. Willcarsrule

    Willcarsrule Member Original Member

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    That was my first question, I could not believe that I didnt find that question in the FAQ section
     
  4. Monte

    Monte New Member Original Member

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    If one makes zero trades this month with the return of 0%, and achives a top ranking in the first 3, then it is vital to bring up the topic of the necessity of being able to sell short in this Simulator.
     
  5. bobis

    bobis Member Original Member

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    Selling short is selling stuff you dont own so how would you do that?
     
  6. Dave Rathbun

    Dave Rathbun Original Creator Original Member

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    It's a standard trading practice. You borrow shares from your broker and sell them. You pay interest on the loan while you hold the short position. At some point you have to buy the shares back and return them to the broker, or you could get "called" by your broker if they don't think you have the capital to manage the position.

    Watch the movie "Trading Places" to see just how fun short selling can be. :)
     
  7. Grimreaper

    Grimreaper Active Member Original Member

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    The GOOG news for da small inbester is dat there now be many ETF's which allow us to chort the overall mawkets....or even the individual mawket seckters. Like watch SKF fer instunce. As soon as it takes out this numba :arrow: 111.30, watch how I make it go WOWZA! to the upside. Make it a duble bartendah! :D
     
  8. prs1065

    prs1065 Member Original Member

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    i would like to learn more about this subject!
     
  9. Grimreaper

    Grimreaper Active Member Original Member

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    You can start by going to the Proshares family of ETF's....ifn yawnto. :wink:
     
  10. Dave Rathbun

    Dave Rathbun Original Creator Original Member

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    I've done some research in order to be able to code short selling into the trading simulator here. There are a couple of rules, and a couple of standard practices which most brokers follow but are not really rules.

    For example, you can only short sell on an "uptick". That means the last trade has to be higher than the one before it before a short sale will take place. If something is in a free fall, where each trade is lower than the one before it, you can't get a short sale filled. That's to prevent a "piling on" approach where everyone simply finds a stock that is going down and keeps pushing it down by selling more. The quote system here has been updated so that the last trade direction (+,-, or even) is reported along with the bid / ask values to support this.

    Another is that you can't sell short something under $5 a share, but if I remember correctly this is more of a convention than a hard-fast rule. I am not sure how it will be implemented here.

    And as I said, there is interest at margin rates paid on the outstanding share balance until you close it.

    Short selling is not a game that a casual investing will typically want to play. When you go long, your gains are unlimited and your losses are fixed. If you buy shares at $10 the absolute most you can lose is $10, and the gains are unlimited. If you short a $10 stock the absolute most you can possibly make is $10 a share, and your losses are unlimited. Add the fact that you are paying interest on the loaned shares and the short sale becomes less attractive for most casual traders.