From the newbie desk: oversold shares

V

VicBee

I use the TOS platform and was trading both AMC and NVDA at the same time. For faster execution I use the buy/sell buttons, only changing the number of shares as I trade. On a couple occasions, I mistakenly used the high number of shares trading AMC for selling NVDA, which left me with a high number of negative NVDA shares which I quickly bought the equivalent number back to reset my holding to zero for fear of reprisal from the gods.
I don't understand what these negative shares are and assumed that TOS would prevent me from selling more shares than I own. Is that what shorting a stock is? My logic can get a bit fuzzy often... Hypothetically, I have 300@$195 and by mistake I sell 400@$200 which leaves me with -100@$200...If the price then goes to $210, I have to buy 100@$210 to bring the holding back to zero, but if the price drops to $190 I end up buying 100@$190... Is that right?
 
Tavurth said:
So you went short?
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I guess that's somewhat my question. I've never shorted stocks before and with this instance, I discovered that I could hold negative numbers of shares and I'm not sure how to profit from it and was hoping for an explanation.
I mean... if suddenly I can make money when the momentum is down, it now means I can make money on the way up and the way down...o_O
 
I've done the same thing in TOS. I wish the last share #'s traded for the specific stock were saved/cached in the DOM so when you change the chart and applicable DOM it reverts back to the prior # of shares used for that stock.

To check if a stock is short-able in TOS, check the upper left hand corner of the chart. HTB, ETB, NTB (hard to borrow, easy to borrow, none to borrow). You're looking for ETB stocks.
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Yes it seems to me that you went short.

If you don't know about shorting then you're pretty new.

Please stick to trading 1 share for at least 6 months.
 
He who sells what isn't his'n must buy it back or go to pris'n.

Vic, you need to have a good understanding of trades and how to enter them.
Imagine you short something by accident and it gets halted due to buyout/takeover.
 
VicBee said:
I ... assumed that TOS would prevent me from selling more shares than I own.
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To prevent selling stocks short, change from a margin account to a cash account. But then you won't be able to use margin.
 
Yes, you short by selling shares you don’t have, and make money on the way down by covering (buying back) for lower price later. But you can lose more than your account is worth if the stock shoots up.
 
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