Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Jerry G. who wrote (20054)	10/31/1997 8:39:00 AM
From: Paul Merriwether	Respond to of 176387

<<I rather new at this...what exactly does shorting mean. thanks >> Shorting is borrowing shares and selling them. You are betting that the share price is going to drop(at which point you will "cover") and keep the difference. The advantage to shorting is that you can hedge your portfolio by buying overpriced and underpriced securities in the same industry. Say you had 1000 intc(long) and 3000 amd (short). You can make money if in a bull market intel goes up a lot more than amd goes down and in a bear market the amd goes down a lot more than intel. Some brokerages pay interest on your shorts. Mine does not since I am on margin(I personally justify having a margin account by making sure that I have a long and short portfolio). The biggest disadvantage to shorting is that your downside risk is infinite. A company's share price can (theoretically) go to infinity and you still have to "cover". Whereas if you are long a stock the most you can lose is your equity(unless you are fully on margin and the share price tanks). regards