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Home >> Stock Forums >> How exactly do you short a stock with scottrade?

How exactly do you short a stock with scottrade?

scl789 said: "Ok i kinda get how to short a stock but not really.... What do you do buy a stock at a high price then sell short then buy back your shares at a lower price and the amount u bought back at the diffrence is profit? That make any sence? So say the price of a share is $30 and i think it is going to go down lower so i buy at $30 then sell short like 2 min later for $30 then 2 or 3 days later it goes down to $20 i made $10 then i can sell the shares i bought back short or something for a total of $40??? and how do you do all this with scottrade? this is prob not right can some one correct me?"

misterjover said: "I don't use Scottrade, but I would suggest that you call customer service and ask them to help you. What you do generally is select a purchase option called "short", which enables you to sell shares at a high price so that you can later "buy to cover" the shares at a lower price, and the difference is your profit. :)"

misterjover said: "I don't use Scottrade, but I would suggest that you call customer service and ask them to help you. What you do generally is select a purchase option called "short", which enables you to sell shares at a high price so that you can later "buy to cover" the shares at a lower price, and the difference is your profit. :)"

HappyHarry said: "Pretty much all you have to do is sell the shares. You don't actually "own" shares when you short them. You "borrow" them from the brokerage. The interface won't show you anything different, just select a sell order."

scl789 said: "ok so i dont have to own the shares to begin with? So before i do anythign i see a stock at a high price like $40 i can sell short even if i dont own the shares? And then when it goes down i can "cover?" and buy short at $30 making $10 profit now when i buy short to cover does that mean that i now own stock in that co???? and if i do i have to sell it to get my money right?"

HappyHarry said: "You're getting it now. But it's even easier than that. Going long: You buy 100 shares of GE at $35 each. You sell them for $45 one week later. You make $1000 dollars. Going short: you sell 100 shares of GE at $45 each. You BUY them for $35 one week later. You make $1000 dollars. It's the opposite of going long. You sell at the beginning of the trade and you "cover" when you buy the shares. So you never actually "owned" the shares at all in a short trade. Does this explanation help?"

scl789 said: "yes i understnad it but the only thing i dont know is how to do this with scottrade and at the end when i buy the shares to cover do i have to sell them to get all my profit? or if i hold them am i going long?"

HappyHarry said: "There's nothing special to do at ScottTrade. You hit "sell". Then you'll see a negative balance of the shares in the account. You won't have to sell the shares when you buy them. You already sold them. Now when you but them, the account goes back to zero. When you sell the stock, the money is added to your account. So if you have a $5,000 account and shorted $3000 worth of stock, your balance would show as $8,000. When you buy the stock at the end of the trade, the money comes out of the balance. Shorting is exactly the same as going long, except in reverse order."