Trading Techniques   

Shorting Information

Hi Cathy,

Did you get a chance to read the shorting article(s) on 4 Mar 08 posted below by harryp?  Hope it's as helpful to you as it is to me.   

As for penalties, there are postings on the SGX thread on this.
But for easier access, could those shortists w/ helpful info contribute here for easier access? 
(I could do a cut & paste here, but I don't want to offend anybody).   

 

Thanks for the replies.          

harryp:  Yes, I was wondering about SBL.  Thanks for the informative website.  

 

Thanks for the info guys.

I will be very careful.

Hey, elf. Are u around?

 

DnApeh :

i'm with poems CFD, seems quite good. most of the counters that i wan to short also got. Btw wats the amt u want to put aside for your cfd ? min. amt to open poems cfd  a/c if i'm not mistaken is 3k. a/c ? and u'll get 5 times the amt to play with.

But in a way shorting with 5 times your amt might be very dangerous, imagine those that short ascott before capitaland take over. really jialat.

 

Well, CMC Markets is good in a way that it provides their clients with free courses on CFD trading. That time they even gave away Nokia 6120 handphones if you make 2 trades within 1st 3 weeks of opening of account. I'm due to get my free HP next week. :)

But, they also have some bad points. First, there's a limited number of counters you can short. Not everything can short, mostly those blue chips only. Secondly, their platform slows down your computer by quite alot. (or maybe it's because my system isn't good enough.)

And even though they provide minute-charts for intraday traders, don't be overly-dependant on it, cos the prices are plotted on bid/offer prices, and the indicators are rather buggy...

 

i heard from my friend CMC Market not bad...well known internationally and also can attend free courses on TA..FA...etc etc...outside courses still need to pay

well...might wanna consider CMC Market...minimum deposit i think is $1k only 

 

Can anyone pls recommend a brokerage to open a CFD account?

I am considering Lim-Tan or Poems.

Thanks.

 

There are 3 very informative articles in Daniel's blog worth reading:

1. General -  http://mystockthoughts.blogspot.com/2007/12/short-selling-part-1.html

2. SBL - http://mystockthoughts.blogspot.com/2007/12/short-selling-part-2.html 

3. CFD - http://mystockthoughts.blogspot.com/2007/12/short-selling-part-3.html

 

 

Shorting is much easier to lose money than longging. If you short, and your transaction goes to the "bucket" people (Here bucket people has some similarity with brokers who eat your orders), then you are in for trouble.  You must hope that what you short actually go to the retail and real investors, and not to those who are waiting in ambush,  to be safe.

In longging, the bucket people can only continue to sell down to make your money.  But they have no control over how the company is doing or going to do in terms of business and profits. Actually in real usage the term to be "long" actually means buying more than you can afford, but most people treat it as buying.

 

covered short means sell 1st, but but back on SAME trading day.

naked short means sell 1st, but never buy (cover) back on the same day, therefore naked.

No, you can naked short for eternity. I f you naked short, SGX will buy in for you at T+4 , with penalty.

It may be a good time to short, but this is a very risky game, even for people with SBL or CFD, where they can cover their position at their own time after paying some fees. I urge you to learn more about the game before jumping in.

 

I didn't know one can naked short for as long as eternity,without needing to borrow any stock?  

Hulumas:  I am sure I would appreciate your reply better without the "every one knows that" part.
I thought this is a real good time to short??  Anyway, thanks for the Chartered Semi Conductor tip though not vested/interested. 


 



 

 

Dear One Sharer,

Without borrowing is called naked short, every one knows that. By the way, it is not a good time to short any counter especially Chartered Semi Conductor by now, it is hard to earn "KOPI" money.

 

Hi:  

It seems that many people (incl myself), from time to time, have questions on shorting.  
Instead of  repeating similiar questions and answers, this is an attempt to put shorting info under one thread.
Hopefully, this can serve as a future reference (I try to make the title easy to remember/search) and minimise interruptions to other threads.
  

May I clarify the following:     


When is it necessary to BORROW a stock?   Is it only when I want to hold a short position beyond T+3?