馃攳
Short Selling Roadblocks You Need To Know - YouTube
Channel: StocksToTrade
[0]
- In today's video, I'm
going to talk about some
[1]
of the road blocks to shorting the stock
[4]
and why you should care.
[5]
(lively music)
[7]
(lively music)
[10]
(lively music)
[12]
Hey, everyone!
[13]
Lead trainer with
StocksToTrade Tim Bohen here.
[15]
Be sure to subscribe and get notified
[17]
as soon as a new video drops.
[19]
Today, we're gonna talk
about some of the hassles
[22]
and road blocks to shorting a stock,
[24]
and primarily, it's gonna be
based on getting a borrow.
[28]
Have you ever tried to short a stock
[30]
and not able to get a
borrow? Comment below.
[33]
It's something many of
us deal with all the time
[35]
Give me a yes or a no.
[37]
Have you ever found that ideal setup
[39]
and been unable to get a borrow?
[41]
Everybody loves to see these stocks
[43]
that spike big, drop
hard, and you'll see a lot
[47]
of people whether it be on Twitter
[48]
or in chat rooms making big money
[51]
when these stocks drop hard.
[53]
And as always, if your unfamiliar
[55]
with short selling, hit
our YouTube channel.
[57]
We talk about it a lot.
[59]
I break it down in a lot of videos.
[62]
I see it a lot especially on Twitter.
[64]
Twitter's known for the fact
[65]
of people that shorting
the big runners of the day,
[68]
making ten, twenty, a $100,000 in a day,
[72]
and you probably saying yourself,
[74]
"Well, I want to make
those kind of profits.
[76]
I wanna book five, six figures a day,"
[79]
and you see these patterns repeat
[82]
where these stocks spike huge
[84]
and then drop twenty, thirty,
50% sometimes in minutes,
[89]
and you're attracted to that
[91]
as all of us are as day traders.
[93]
But something that many,
many, many new traders
[96]
don't realize until the time comes,
[99]
you may not be able to
borrow these stocks.
[103]
You may not be able to make that trade.
[106]
So, let me back up a little bit
and explain what I'm saying.
[110]
When you own a stock, say
you're a big institution,
[113]
you're an insider, you have to agree
[116]
to loan your shares out to brokerages
[119]
so that they can then
allow people to short them.
[123]
That's the first step.
[124]
Many of these low price stocks,
[128]
no one is willing to loan them out
[130]
or if they are loaning them out,
[132]
there's such a small amount of shares
[134]
that maybe only one or a handful
of people can short them.
[139]
That's the big, first road block.
[141]
Second is
[143]
borrows vary broker by broker.
[146]
So
[147]
if Joe
[148]
lends out a million of
his shares at Broker A,
[152]
and you're over here at Broker B,
[154]
you might see somebody on a chat room
[157]
in Twitter shorting the
stock, and you're like,
[159]
"Well, why can't I,"
[161]
and you call your broker
and they simply say,
[163]
"We don't have the
borrows to lend to you."
[166]
So someone might be making
those big, big gains,
[170]
you're looking at the same stock,
[171]
you want to do the same thing,
[173]
but you're broker
doesn't have the borrows.
[176]
And that is something that
I see most common and often,
[180]
many traders that are short biased
[183]
have brokerage accounts
at multiple brokers.
[186]
Tim Grittani, a good friend of mine,
[188]
may be the most successful
penny stock trader out there.
[192]
I interviewed him on
the SteadyTrade podcast
[195]
a few months ago, and last I
knew of as a few months ago,
[198]
he had seven brokerage accounts.
[201]
He might have even more now
because he's always chasing
[205]
that borrow around to
different brokerages.
[208]
Now, it's great for a
trader like Tim that's made,
[211]
I think, seven or eight
million over the years.
[214]
He's got plenty of equity to
spread across those accounts.
[217]
If you're a new trader
[219]
with a couple thousand dollar account,
[221]
if you try and spread a
couple thousand dollars
[223]
around seven brokerage accounts,
[225]
you're gonna have $200 in each account.
[228]
You're gonna struggle to trade.
[229]
Keep in mind that that is something,
[232]
an impediment, to shorting
[234]
and really makes it difficult especially
[236]
for the newer trader.
[237]
I wish the rules were
the same for everyone.
[239]
I wish it was a level playing field,
[242]
but the dilemma is especially
lower priced stocks
[245]
that are hard to borrow, most of the time,
[249]
that is a gain for the big boys,
[250]
the guys with the bigger accounts
[252]
because they can spread
across multiple brokerages
[255]
and have higher buying power.
[257]
So, in closing,
[259]
it's a bummer.
[260]
I wish it wasn't the way it is,
[262]
but it can be very, very difficult
[265]
to short these low price these days.
[267]
It used to be a little easier,
[269]
but as you seen short spelling explode,
[272]
the borrows disappear quicker
because there's more demand
[275]
for those borrows, and I would say,
[278]
"Remember, learn the
fundamentals, learn the basics
[282]
of breaking down a chart,
interpreting the news,
[285]
and making a good trade plan."
[287]
I think
[288]
the best short sellers
[290]
were long biased first.
[292]
They were buying stocks.
[294]
They were buying breakouts.
[295]
They were buying the
big movers of the day,
[298]
and as they refined their skills,
[300]
as they grew through the years,
[302]
then they would start getting
into short selling more.
[305]
Not saying you can't do it as
a new trader, but be cautious.
[310]
Learn the basics.
[311]
Get good at going long.
[313]
I've talked about Tim
Gritanni a couple times.
[315]
You can look at his history.
[316]
When he started out,
[318]
he was almost all
[319]
going long,
[321]
breakout stocks,
[322]
then grew his account, grew his skills,
[325]
then became predominantly a short seller.
[328]
Don't try and put the cart
in front of the horse.
[331]
Thanks for watching our video!
[332]
Be sure to comment below with
any trading related questions.
[336]
We love answer new questions.
[337]
Also, like and share with your friends,
[340]
and be sure to subscribe to be notified
[342]
as soon as our next video hits.
[344]
And if you're looking to
expand your trading knowledge,
[347]
don't forget to check out
all of our other videos,
[349]
and be sure to click the trial below.
[353]
Check out StocksToTrade.
[354]
I think it is one of the best,
[356]
most rapidly advancing
softwares out there.
[358]
Be sure to check out our trial.
[360]
(lively music)
Most Recent Videos:
You can go back to the homepage right here: Homepage