From the newbie desk: oversold shares

[VicBee]

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.

Thanks guru for the only simple confirmation I was looking for.

 

[VicBee]

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.

Why is that? If I don't short shares, why do you think I couldn't handle trading? I made high 6 figures in 2020 without ever shorting shares.

 

[Tavurth]

Why is that? If I don't short shares, why do you think I couldn't handle trading? I made high 6 figures in 2020 without ever shorting shares.

2020 was not a normal year. Don't think you're king because you make easy money only going long in a bull market.

 

[VicBee]

2020 was not a normal year. Don't think you're king because you make easy money only going long in a bull market.

I get that and that's part of the point. If the market doesn't warrant shorting, like in 2020, then I'm not familiar with the practice. It doesn't mean I should stick to trading 1 share for 6 month... it's condescending and not relevant.

 

[Tavurth]

I get that and that's part of the point. If the market doesn't warrant shorting, like in 2020, then I'm not familiar with the practice. It doesn't mean I should stick to trading 1 share for 6 month... it's condescending and not relevant.

This information was given because I assumed you're a newbie. I'm sorry for that, I would assume that if you've been trading a year you know what shorting is.

Markets are likely to get into some turmoil. This is why I suggest cutting your size, if you're not comfortable in both directions.

 

[traider]

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.

Market makers say hold my beer

 

[JSOP]

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?

Yes.

 

[trevabenefield]

I think you went short. To prevent the same from happening in future, you can shift to a cash account from a margin account.

 

[VicBee]

I think you went short. To prevent the same from happening in future, you can shift to a cash account from a margin account.

Yes, I discovered inadvertently that I could short some stocks by simply selling more shares than I hold. I just had never done that in my long and illustrious 1.5 year trading career, but now I know and have even started doing it on purpose.... Wadda thrill!