Anyone know how to short-sell investment banks???

[kyleAF]

I was planning on shorting Bear Stearns A LOT 2 days ago, but could not manage to find the index symbol to purchase short-selling shares...and I LOOKED all over the net.

Anyone know how to do this? I'm new to this actual stock-investment thing. I could have made a significant amount today with Bear's 45% drop...

I'm currently short a basket of financials and am making money on it, but I'd like to pick out individual banks I think will be hit hard (mostly intuition).

Also: anyone know how to purchase staples farming equity shares or actual wheat / soy / corn / rice shares (not options and futures)???

Right now, all I've managed to do is make some money shorting the major indexes a bit... I think the DJIA will be well below 10,000 by September, and have bet on it.

Anyway, any info is much appreciated!

 

[misa]

Hi Kyle, I know that the first thing 'pros' will tell us newbies about trading is, "don't do it if you don't know about it."

If you want to practice trading, there are several sites where you can do that. Google 'virtual stock market', and you can trade yourself silly there. That is what I do, cuz although I have a hunch on several stocks can be shorted, I don't have the guts to do it with my own money, yet.

There is no special stock symbol for shorting, it's still BSC. It's just a different way of 'buying'. Shorting is also a next level type of trading. The brokerage company will give you some paperwork to do before you can do it.

 

[Cowlesy]

Be super careful if you are going to start shorting individual stocks. You can go long the double-inverse short ETF (SKF) that gives you outsized leveraged returns being short the financials.

If anything, buy put options. I think Lehman saw a lot of put buying today but I don't do options so I don't know the details. At least that way you know your risk capital involved.

 

[kyleAF]

OK. That was my suspicion, since my shorts are actually a specific index through proshares. I am willing to risk a certain amount of money, with which I will learn the processes (and hopefully make something!).

I suppose I should've connected the dots myself, since shorts are basically borrowed shares, which you sell, with the bet that the market will be lower when you have to buy them back and return them.

I'll check out the virtual market though... that sounds useful, too.

 

[jonahtrainer]

I was planning on shorting Bear Stearns A LOT 2 days ago, but could not manage to find the index symbol to purchase short-selling shares...and I LOOKED all over the net.

Anyone know how to do this? I'm new to this actual stock-investment thing. I could have made a significant amount today with Bear's 45% drop...

I'm currently short a basket of financials and am making money on it, but I'd like to pick out individual banks I think will be hit hard (mostly intuition).

Also: anyone know how to purchase staples farming equity shares or actual wheat / soy / corn / rice shares (not options and futures)???

Right now, all I've managed to do is make some money shorting the major indexes a bit... I think the DJIA will be well below 10,000 by September, and have bet on it.

Anyway, any info is much appreciated!

I use Interactive Brokers and just make sure the order is a Sell instead of a Buy. Perhpas you need the order to be a `Sell to Open` instead of `Buy to Open`. Every broker is different.

Oh, based on your additional comments, make sure you have a Margin account and not just a Cash Account. You haven`t lived until you have been margin called

 

[kyleAF]

Be super careful if you are going to start shorting individual stocks. You can go long the double-inverse short ETF (SKF) that gives you outsized leveraged returns being short the financials.

If anything, buy put options. I think Lehman saw a lot of put buying today but I don't do options so I don't know the details. At least that way you know your risk capital involved.

I'm in on SKF already. Thanks though!

I might look at options. I'm reading a book about all of these structured deals (Traders, Guns, and Money), and options seem like a decent way to go. The complexity of the whole thing is staggering, though. It's no wonder that no one knows the real value of their off-the-book assets!

I've seen that it's basically a gamble, with the most successful long-term investors being those who probably took Buffet's advice to heart:

"Invest in what you know."

I'm fairly confident that the financial industry is tanking, and will continue to do so--despite the contrary attempts by the FED-- (which is more than most people are aware of, I think), so that's a start. I'm also somewhat familiar with some commodities futures (in terms of technological advancements), as I have a Materials Engineering background.

 

[kyleAF]

I use Interactive Brokers and just make sure the order is a Sell instead of a Buy. Perhpas you need the order to be a `Sell to Open` instead of `Buy to Open`. Every broker is different.

Oh, based on your additional comments, make sure you have a Margin account and not just a Cash Account. You haven`t lived until you have been margin called

I'll look into the margin account. That's only necessary if I borrow funds, right? Right now, it's just my money I'm risking directly. I'm not beholden to anyone...

Is this from the "borrowed shares" statement?

 

[grizzums]

I'll look into the margin account. That's only necessary if I borrow funds, right? Right now, it's just my money I'm risking directly. I'm not beholden to anyone...

Is this from the "borrowed shares" statement?

If you are going to be shorting shares of individual stocks you'll need to have a margin account. When you are shorting, you are selling short, so you are selling "borrowed shares" of which you will have to "buy back." Unless of course you are shorting "against the box"...meaning you are selling shares short that you can cover on your own (usually from converting debt to equity) w/out having to buy them back in the open market.

FRB's Reg. T demands you have 150% of the value of the position when the short was created and you have that in a margin account. Remember, in a long position you can lose 100% of your bet...in a short position your losses are only limited to your margin allowance. Having a margin account also allows your brokerage firm to liquidate your account if need be to cover your short if the value of what you have borrowed diminishes significantly as this is part of the signed agreement for the margin account when you create it. A brokerage firm cannot liquidate a cash account. Allowing short selling in a cash account would add too much risk for the lender of the shares.

Good Luck.

 

[DrCap]

I use Interactive Brokers and just make sure the order is a Sell instead of a Buy.

Yeah! Interactive brokers... I don't have the guts to sell short - at least not on a major scale though I've been thinking about opening an account with interactive brokers... they are also a hedge fund which has been in the gold futures market for something like 20+ years. They know gold and volatility is their best friend. I think that the way they operate they are probably one of the few winners in this crazy market and so months ago bought up a chunk of shares in the company. I'm planning on buying more but I'm hoping their stock will fall more in price during this wild time, then I will buy more shares prior to their next earnings announcement. Though this is betting on my gut and usually I loose when I do that on individual shares, I'm usually an indexer and have no nerve with individual company shares.

 

[AceNZ]

n/m

 

[OptionsTrader]

Hi Kyle, I know that the first thing 'pros' will tell us newbies about trading is, "don't do it if you don't know about it."

Don't do it if next week if you have to ask questions.

Next week, you are going to be competing with money hungry insanely rich sharks that will eat you alive. Next week is a good time to be not trading unless you want to compete with the sharks in their water and they set the rules.

The BSC price action on Friday is in the past and is not indicative necessarilly of more of the same next week. You could just as easily see BSC shoot to $100 if private equity floats a rumor of a cash infusion or some other BS lie.

The market short interest is dangerously high and I would not be surprised if we see a violent bear market short covering rally next week.

Besides, the market is going to be Hella violent with the wed FOMC decision and opex friday.

Unless you want to swim with the sharks and try to pry gold fillings from their teeth, the prudent thing to do next week is nothing til thurs.

 

[Corydoras]

I was planning on shorting Bear Stearns A LOT 2 days ago, but could not manage to find the index symbol to purchase short-selling shares...and I LOOKED all over the net.

Am I completely misunderstanding you? Yahoo Finance is pretty good.
http://finance.yahoo.com/lookup
http://finance.yahoo.com/q?s=BSC

 

[kyleAF]

Don't do it if next week if you have to ask questions.

Next week, you are going to be competing with money hungry insanely rich sharks that will eat you alive. Next week is a good time to be not trading unless you want to compete with the sharks in their water and they set the rules.

The BSC price action on Friday is in the past and is not indicative necessarilly of more of the same next week. You could just as easily see BSC shoot to $100 if private equity floats a rumor of a cash infusion or some other BS lie.

The market short interest is dangerously high and I would not be surprised if we see a violent bear market short covering rally next week.

Besides, the market is going to be Hella violent with the wed FOMC decision and opex friday.

Unless you want to swim with the sharks and try to pry gold fillings from their teeth, the prudent thing to do next week is nothing til thurs.

Thanks! I know that things will be volatile, and I'm not betting that trends will continue based on the past.

 

[kyleAF]

Am I completely misunderstanding you? Yahoo Finance is pretty good.
http://finance.yahoo.com/lookup
http://finance.yahoo.com/q?s=BSC

No, what I was really looking for was an easily bought short share (like proshares) that's more specific than a general financial short. I guess if I want to actually attempt this, I'll have to do it by hand...

Thanks!