Short Selling

Short selling is the act of selling a stock first and then purchasing it at a later date. The mechanism actually involves borrowing the shares to sell and then purchasing the shares at a later point in time to give back and cover the borrowed shares. This happens automatically in the current electronic age, although there are some thinly traded stocks that are hard to borrow and therefore hard to short. You must be able to borrow shares to short them. The goal of short selling is for the price of the stock to go down. It’s the same concept as buying a stock, just in reverse. If you sold short shares at $20.00 and the price declined to $15.00, you made $5.00. Shorting technically can have unlimited losses, as the price can go up to infinity; while when buying stock, you can lose only 100% of your investment, no more, as the shares can only drop to $0.

Collapse of China’s Stock Market: Media Blames George Soros

By Thursday, July 9, 2015
China Stock Market Collapse George SorosChinese media outlets are blaming George Soros and other foreign speculators for the recent selloff in China markets. China’s stock markets have sunk roughly 30% over the last three weeks, costing investors some $3.5 trillion in market value. Taiwan-based China Times is now blaming the selloff on malicious ‘foreign’ short-sellers..

How to Turn a Profit by Buying “Bad” Companies

By Tuesday, October 1, 2013
Turn a Profit by Buying “Bad” CompaniesGroupon, Inc. (NASDAQ/GRPN) is up a sizzling 368% from its 52-week low of $2.60 on November 12, 2012. Many in the market thought Groupon was dead. I was not one of them; I actually saw a possible short-covering opportunity due to the massive short-selling position on the stock. All the company needed was some good news to drive the shorts.

Why Tracking the Heavily Shorted Stocks Makes Sense

By Wednesday, June 5, 2013
Tracking the Heavily Shorted Stocks Makes SenseWhen I look at potential trading opportunities, I like to scan for stocks that have high short selling positions in them. These are the traders betting against the stock. Now, while there’s always some validity to why a stock becomes a short selling target, it’s not always the case; this is where I see contrarian trading opportunities..

How You Can Play Google in Spite of High Price

By Wednesday, January 23, 2013
How You Can Play GoogleIn my view, Google Inc. (NASDAQ/GOOG) is tops in the Internet space, and a better play than Facebook, Inc. (NASDAQ/FB) and Yahoo! Inc. (NASDAQ/YHOO), based on my stock analysis. (Read “Facebook’s Hot, But Valuation’s Questionable.”) At just over $700.00 a share, you may think the stock is expensive. On an absolute basis, a .

Stock Market Breakdown: How a Correction
Would Be a Buying Opportunity

By Monday, May 7, 2012
earnings seasonI’d like to see a stock market correction so income investors could buy good dividend paying stocks at fair prices. I’m not rooting for disaster, of course, and I’m not fond of short selling. I just think that, if the stock market pulled back a normal three percent to five percent from its current level, it would make for a very good .

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From: Michael Lombardi, MBA
Subject: The $2 Silver Stock Every Investor Should Own!

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