Community

Share knowledge. Find answers. Ask questions.

Online Share Trading

Engage and learn about markets and trading online

Barry / russ / simon and all the clever traders

Reply
Ben_ladin
Contributor
Can someone explain to me , why is it only certain stocks that can be shorted ? and all of the stocks that can be shorted that I have seen their charts point to the upside or is turning up . But stocks that are on their way down what would be a good short . You can not short them .
0 Kudos
Reply
11 REPLIES 11
Super Contributor
Inadequate liquidity for the bank to establish risk control through margin. More likely though - they can't find stock to borrow for you to short it... mostly for the same reason. The effective result of both of these factors regarding their "in house" holdings of the specific share. The open interest on the short side is so high that it is deemed to pose to great a reversal risk relative to a reasonable margin.
0 Kudos
Reply
Super Contributor
Sometimes the counterparty will only offer shorts of stocks on which they are long since this is a hedge play. AND the reverse. So - if the bank strongly believes a share is going down - (clear trend) - they are shorting (or clearing) their own book - not lending it to you to short.
0 Kudos
Reply
Super Contributor
Oh - and BTW - - I am not a "clever" trader unless basic abstinence qualifies me. So perhaps...
0 Kudos
Reply
Super Contributor
I short with cfd's, if at all. It is very annoying to find a stock that you want to short only to find that OST does not offer it as a short. This happens often, even with top40 stocks eg. cpi, tbs etc. and with indices like stxind (sxicfd).Sometimes I want some shorts as a hedge and it seems unfair that you can't balance your portfolio in this way.
0 Kudos
Reply
Super Contributor
I gave up shorting individual shares long ago,as i found them too volatile....I only short the Top 40 index purely as insurance against the value of my shares declining and only when the major trend is down as it is now....I use the knock out warrants as there is no time decay only a small charge... At the moment i am holding TOPSKR and after our rates decision might add TOPSKS.
0 Kudos
Reply
Super Contributor
Bin Laden, IG markets offer shorts on all those shares, that OST is too scare to offer a "short on". Be smart, explore with other platform that caters for your requirement.
0 Kudos
Reply
Super Contributor
Barry, do you know any platform that offer a greater variety of warrants.
0 Kudos
Reply
Super Contributor
Barry, do you know any platform that offer a greater variety of warrants.
0 Kudos
Reply
Super Contributor
be wary as well that other brokers may offer all the products but sometimes it pays to stick with the devils you know. broker wise chose which is best to you but i mean products or in this case cfd so the popular cfd's. also note counter party risk with other brokers having a larger institution as a backing sometimes gives mental surety
0 Kudos
Reply
Valued Contributor
preston warrants are exchange tarded so same for all brokers .. unless you trade OTC options on safex, but that requires serious size
0 Kudos
Reply
Super Contributor
I'VE found OST the most honest,used to trade with a coupe of other local banks,don't really want to name them as i have other connections with them. One complaint i had with them was that they did not always have a live broker on hand at critical times when I wanted to sell ,always to my detriment!
0 Kudos
Reply