Your stock market questions answered

lookout123 · 04-27-2005, 08:17 PM

you also may have been speaking about SELLING SHORT. that is a little less complicated than options.

I don't own ABC, co which is trading at $50. i think it is going to fall to $40 in the near future. I sell "short" 1000 sh of ABC at $50. effectively i have taken a loan without a specific repayment schedule. It does have to be repaid though. if ABC drops to $40 i will buy 1000 sh of it to cover my short position, effectively repaying my debt to the person that loaned the sold shares to me. if however, ABC, co goes to $60, i still have to, at some point, cover my position and buy the shares which may result in a drastic loss. generally you don't sell short without some sort of LIMIT order set.

04-27-2005, 08:17 PM	#4
lookout123 changed his status to single Join Date: Apr 2004 Location: Right behind you. No, the other side. Posts: 10,308	you also may have been speaking about SELLING SHORT. that is a little less complicated than options. I don't own ABC, co which is trading at $50. i think it is going to fall to $40 in the near future. I sell "short" 1000 sh of ABC at $50. effectively i have taken a loan without a specific repayment schedule. It does have to be repaid though. if ABC drops to $40 i will buy 1000 sh of it to cover my short position, effectively repaying my debt to the person that loaned the sold shares to me. if however, ABC, co goes to $60, i still have to, at some point, cover my position and buy the shares which may result in a drastic loss. generally you don't sell short without some sort of LIMIT order set. __________________ Getting knocked down is no sin, it's not getting back up that's the sin Last edited by lookout123; 04-28-2005 at 06:53 PM.

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