Selling short

[trackers]

Hi guys,

With aspirations on becoming a full-time trader (great timing i know!), i really hope someone can help me with the concept of selling short.

Now i know what selling short is, but what gets me is how to do it?? Is this common practice around the brokerage houses of NZ? (i am currently using ASB securities). what i mean is can i just ring up a broker and say 'can i sell x shares in y stock short', because they're the losers if i'm right are they not? If someone has sold shares short, it would be wonderful if they could enlighten me on the process. would really appreciate it....

[duncan macgregor]

TRACKERS, you have already started this thread on investment strategies why double up?. macdunk

[trackers]

because that thread is relatively inactive and no-one has replied lol

[port hills]

Trackers, have you tried asking your broker?
I have never sold short but I believe ASB do have such a facility.
(I may be wrong)

Aussie is generally more advanced than us in these things so if you get no joy over here you can probably short the dual listed stocks in Aussie.

Be careful, remember when shorting the potential loss is infinite but the gains finite. (the opposite of going long)
:)

[Bling_Bling]

First up, I dont recommend Short Selling for a beginner. Here goes, if you wanna short. First, get a broker that has facilities to short, usually the top 30-40 stocks or if the broker has stock to lend for short selling. You can borrow 80% of the stock to short and pay for 20% as deposit. If the stock price goes up by more than 5%, there is margin call.

Bling thinks if short goes wrong, it will hurt hard. I have tasted the bitter pill in the past and do not recommend it.

[lambton]

Tracker. I think you will find that brokers facilitating a NZ "short" have a bail out clause in case of need, meaning they can call the shares back at anytime. I looked at shorting the NZ market a couple of years ago (would have got slaughtered as it happens) and walked because the odds were stacked in favour of the broking community.

[trackers]

o ok thx guys, still plan to keep it as an option. Going to talk to Macquarie about it tomorrow - the way i see it, surely, is that in a bear market more stocks are going down than are going up, no? just trying to stack the odds in my favor at all times. well thats the plan.

[Studson]

I see your reasoning trackers and the exact same thoughts have crossed my mind!. I, like others on ST would be interested in your findings if you would be so kind as to post the more relevant info. TIA. ;) Cheers.

[trackers]

no problem :) Talked to a broker at Macquarie..he explained that whilst it was rare, it was still possible. As mentioned above, they only will do it in liquid, nzsx50 type stocks (stocks able to be moved without difficulty). still waiting to hear more.