shorting stocks

TheBramble

Legendary member
8,395 1,171
Destiny - I'm not certain, but I think the lack of response was due to the way you asked your question.

What do you mean 'best'?

All brokers will short stocks that can be shorted if they can be (uptick) at the time you want to short them.

What did you mean to ask?
 

destiny

Member
84 0
thanks for the reply bramble,
i dont know anything about shorting stocks, i assumed very few brokers allow you to short. i have never come across an online platform that will short stocks. do you know of any online broker who will allow you to short stocks online? just like buying stock, same spread, prices etc but instead stock is sold first?
 

TheBramble

Legendary member
8,395 1,171
I think it would be more interesting to ask 'which brokers don't allow you to short stocks'.

I've only used IB and DAE. Bith of which provide this facility.

Do you currently have a broker?
 

dilmun99

Newbie
3 0
(refers to US) To short stocks your broker borrows shares on your behalf and sells them for you. You will pay an amount in lieu of dividends on dividend dates. If you're an institutional investor you will be credited interest, but most brokers pocket it for retail. If its an illiquid stock, your broker may be unable to locate the borrow, or if they do find shares, may have to give them back at little or no notice. (i.e. close out your short by buying shares and giving them back to the lender). It's normally not possible to short shares less than $5. Shorting exposes you to theoretically unlimited risk since a long position can only go to zero, wheras a stock can double or more. The uptick rule applies to common stock, but ETF's like QQQ are exempt I believe. Generally, You should be very comfortable with the ins and outs of investing long before you think of shorting. Price patterns are also very different on the short side - a whole different world for technical analysis. The key in shorting is to have a broker with a good access to shares to borrow - as noted, IB do a good job on this, but any of the larger frims should be fine. But only short liquid stocks.
 

Racer

Senior member
2,666 30
If you want to short UK shares, use CFDs, some give you direct access i.e. put orders directly onto the Level 2 order book so you can sell on the bid and buy at the ask
 

EK1

Established member
654 18
Racer,

who would you recommend as a broker.

As far as I see it there are 2 sorts:

- those that have little (or no) spread and charge a commission per trade

- those that are commission free with wider spreads?

Any guidance appreciated.

EK
 

destiny

Member
84 0
can someone please recommend me a broker to short equities using an online dealing platform besides CFD's. await a reply..
 

theknifemac

Well-known member
340 0
destiny said:
can someone please recommend me a broker to short equities using an online dealing platform besides CFD's. await a reply..

Destiny

As Gary has said above IB allow you to short, but you must take into account the uptick rule as Bramble pointed out. This is a SEC requirement not something imposed by the broker. Most online brokers will allow the shorting of stock, but will have a list of shortable stocks as Gary posted the IB one. This is because under certain situations a stock will not be shortable as the broker cannot borrow the stock from a long holder to sell for you. Also some stocks are on a list which is not currently shortable due to another regulation. Someone else can dig that one out for you.

Hope this helps

Stew
 
 
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