Quote:
Originally Posted by Idigmygirls
Please explain to me how you can sell a stock that you don't own without shorting it?
Shorting a stock is inherently a leverage position. Unlike buying a stock, which can only result in a loss of the amount that you paid to buy it, shorting a stock can result in unlimited losses, as there is no roof to a stock (there is always a floor, which is zero).
So, please explain how to short without creating a potentially unlimited liability.
And dude, no need to get so upset. It's okay to be wrong. Don't gamble with your dick lol. I can assure *you* that you'll regret this tomorrow....
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While your answer is theoretically correct it is still based on the same idea of a single 'all-in' but if you have for example a 1million$ account,you are not forced to expose yourself to the situation in which if the x trade does a 2x,your account becomes 2x bigger ; or if the trade goes 0.5x your account also halves . You can simply choose a smaller margin.
P.S. : When you short,you 'borrow' stock shares to trade them,so while you don't physically own them,you still have them from a CFD perspective.
P.S. : If I buy the stock Y which trades for 400$/sh ,I will obviously pay 400$ to get 1 share. While If I borrow a Y share to enter a short position, I'll also borrow it for 400$