I understand what people will say. They will say that the guy who is bidding doesnt own the shares. Hence you have to borrow them from someone to complete the transaction. What I want to know is why thats neccessary if we both have posiitive account balances. Surely there is really only a matter of accounting to be worked out whereby his account gets debited or credited and my account gets debited or credited according to which way the price moves.
short selling stocks
- Thread starter bigitop
- Start date
No that list will never be OK to base a strategy on. The reason is that it contains almost exclusively the wrong kind of companies. Its full of junk that nobody actually wants to trade. Meanwhile its deliberately taken out every possible tradeable stock so that in essence you cant trades tocks that are viable candidates for trading. And thats not an accident. Thats a deilberate policy on the part of IB to behave in a way guaranteed to damage people who make there living from US securities in particular.
Big Game Hunter: you are raising some issues that i'm really interested in.
So let me see if I follow you.
You're saying that it's just a matter of clicking on the Sell button even if there are no shares that have been located for the borrowing, because I can just buy the shares at a point in time in the future.
Are you saying basically that I can short any stock I want?? even if there's no process of locating someone willing to lend them to me for the short?
if this is so, then why would there be such things as shortable lists in the first place?
and, technically, does the TWS even allow you to place a Sell order if you dont own any shares in the IB system?
What do you mean about IB deliberately making short-sells virtually non-feasable??
then my question again is: how can day-traders make a living short selling?
Really Im just annoyed that IB would put out a short list and I go through a big list of stocks that I like for trading purposes and none of them are on there! Its really not a true depiction of the situation. It makes everything farcial because theres clearly something not right when most of the stocks Im liking trade over 2 million shares and yet if you believe their current shorlt list they cant be shorted. I mean how can you have confidence in a situation like that where its just basically a circus where for the hell of it IB suddenly releases a list like that? What the hell are they doing?
But in answer to your question no you cant just naked short a stock, although in my opinion you should be able too if neither party intends to take physical delivery of the stock. I mean why is it a problem for stocks and not a problem for commodities or futures or forex. It just seems wrong is what Im saying. I mean I can naked short 1000 contracts of some futures junk but not 100 shares of some dreck stock. Cmon thats a farce.
But in answer to your question no you cant just naked short a stock, although in my opinion you should be able too if neither party intends to take physical delivery of the stock. I mean why is it a problem for stocks and not a problem for commodities or futures or forex. It just seems wrong is what Im saying. I mean I can naked short 1000 contracts of some futures junk but not 100 shares of some dreck stock. Cmon thats a farce.
I'm currently at TK and am getting a lot of rejected short trades. The one thing I don't inderstand is that a lot of these stocks have shorrt ratios near 10% which means someone got short at some time but it seems recently well over half my short trades get rejected. I've checked at IB and they are not much better. I also checked MasterTrader and they seem to be significantly better equipped to complete a short trade. Does anyone here have any insight on MasterTrader?
MasterTrader uses Penson for clearing. It is the clearing firm that holds the inventory. Penson is usually pretty good. But I only trade very few stocks/ETFs: AAPL, RIMM, SPY, GS, and recently SKF.
SKF and FAZ in recent days were not available for shorts. Too many people had shorted them.