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Home >> Stock Forums >> Going Short, Going Long??

Going Short, Going Long??

SHIFTY101EASY said: "okay im doing a mock stock buying thing online and it asks if i want to go short and sell, when i try to buy stocks...? i dont get how you can sell when you havent even bought yet?? and going long...does that mean u are gonna have to be keeping it for a long time? is going long just meaning going to keep it for a while, and going short meaning buying it, then quickly selling it?"

HappyHarry said: "Your account needs to be margin-enabled. When you short sell, the brokerage lends you the stocks to sell, which happens automatically. When you buy back the stocks, the trade is completed."

Heather said: "Long would be something that you plan on holdiing for some time. Short term would be something you did for a quick profit and then sold. If a stock is sold within the first year of holding, you are responsible for capital gains taxes!"

SHIFTY101EASY said: "good point about capital gains...how much are capital gains anyways?"

alhamid said: "Long Term Capital Gains tax is 15%. Most personal income is taxed at 38%, so you lose 23% on any trade you don't hold for more than a year. That has to be taken into account when considering how to trade."

SHIFTY101EASY said: "jeeeezzzzzzzz.....they sure know how to burst my bubble... oh well, investing is still fun, even if you barely get your rightful profit out of it...."

trickynick said: "[QUOTE=Hathor]Long would be something that you plan on holdiing for some time. Short term would be something you did for a quick profit and then sold.[/QUOTE] That's not what it means in this context. Short selling is a method of selling stock which enables you to profit from a stock falling in price. You borrow shares, sell them and when they fall in price you replace what you borrowed at a lower price than the price you borrowed it at. SHIFTY101, go to investopedia.com and look up short selling to understand it better."

kbonta said: "Tricky Nick, I would have to agree with you. Some people really have no idea what short selling is. It is not selling a stock on the short term like someone else has stated. For the original poster, "short selling" is basically selling shares you don't own. Then, you would buy them back at a lower price anticipating that the price of that stock would drop. Obviously , you would have to open a margin account with your broker, making sure you have enough funds that just in case the stock price would go up, then your broker would email you, or "red flag" your account demanding a margin call. At this time, you would either add funds to your margin account or buy to cover your losses at the higher price. If you add funds to your account thinking it went up some but should go back down later, then your playing too emotional. Try giving yourself an 8-12 % buffer then end it. I should of shorted Siri when it hit $12.00 a share(knowing it was temporary), because it dropped to 4.70 a share within a week. Would have been nice. Good Trading, KB"

Heather said: "My bad. I must have not read in context. Thanks for the clarification, boys. :D Short selling is selling a stock before you have bought it. Short "term" trading is what I was talking about.. Cheers!"