Shorting

[Blackxacto]

In order for me to sell a stock in the future, having purchased the right, there must be a buyer at the lower price? Correct? If the stock price is going down, reasoning my short objective, why would anyone buy a declining stock in a declining momentum situation? Doesn't this depend upon foolish buyer"s in a downward momentum? How many buyers are there for a declining valued stock?

I am having trouble wrapping my head around why folk's would buy my borrowed stock in an downward trend. I would think most people don't want to buy a downward spiraling stock, right? Whereas I understand selling stock at a lower borrowed price.

Sorry for my confusing wording, maybe you get the jest of my confusion.

Or maybe I know just enough to be totally confused and deadly?

 

[wackypete2]

You have to think differently. You are assuming someone is buying to initiate a long position when that's not necessarily the case. Here's a simple example:

A stock in a major downtrend. I short it at $50. Sometime later you short it at $30. So who bought when you were shorting in a major decline? Me!! I covered my short position with a $20 profit.

The point is there are plenty of traders buying or selling for unknown reasons.

Peter

 

[rsh01]

Knife catchers, bottom pickers, they're everywhere

 

[Blackxacto]

Peter,

"Short at 50, that means I chose earlier to sell at a set $50 price? I guess shorting has always confused me What am I hoping to happen with a short strategy? You had to have a buyer at 30 just like I had to have a buyer at 50, I made money, you made 20 more money, but why would anyone buy declining value so we can make money?

 

[barjon]

Peter,

...............but why would anyone buy declining value so we can make money?...................

turn it on it's head - why would anyone sell increasing value etc. - that might make it easier to understand

 

[rsh01]

Buy low sell high?
There's another side to the crap/good trade.

 

[wackypete2]

Peter,

"Short at 50, that means I chose earlier to sell at a set $50 price? I guess shorting has always confused me What am I hoping to happen with a short strategy? You had to have a buyer at 30 just like I had to have a buyer at 50, I made money, you made 20 more money, but why would anyone buy declining value so we can make money?

You are very confused.

Peter

 

[rsh01]

Have lego done a trading theme yet?

Technical trading lego.

 

[Blackxacto]

"why would anyone sell increasing value" too make money, I get that, but, PATIENCE please, to sell short I must have a buyer, what is their strategy telling them?

 

[rsh01]

Trolololollll

That it may go up some-time?

'Time' may not be the same 'time' as your trade

 

[Blackxacto]

Some clarity after reading suggested threads on shorting.

I sell my brokers stock, agreeing to replace his stock in a time period. I guess I was hung up on the front end selling. If the market is swinging downward, and I am hoping for buyers in declining momentum, do the buyers ever get scared and evaporate? The short will not happen right if there are no buyers?

 

[rsh01]

Google "supply and demand for dummies" then don't come back.

 

[Blackxacto]

Ah, patience, Senior Members and sweet patience. God I love Pricks.

 

[rsh01]

I apologise.
If you wanted to sell your car for 5k and there were no buyers, and still none at 4k, nor 3k not because it was only actually worth 1k but because they 'evaporated', do you think there would still be no buyers @ 0.01p/c?

Not that fair value has any place in todays markets.