I don't see any difference between short selling and gambling

I don't see any difference between short selling and gambling .

They're both fucking retarded .
How am i wrong?

Also . Why the hell would banks do this, Their besmirching their own product, and brand name, potentially FOREVER by letting their AAA bonds fail like that.

How do you honestly trust the banks and american market after this?

It's gotta be the dumbest shit EVER .

Still wouldn't short em , when I can get the same effect by buying after the collapse, but actually have tangible assets, and not worry about the failure of the bank, in event of any irregularity in the market.

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Bullshit you can short something to hedge your portfolio so shut the fuck up and read a book

And you think buying a """"dip"""" is any less risky? Shorting is betting against idiots who generally lose money, rather than competing with people to get in on a quick rise. As TVIX approaches infinity, their share value approaches 0. So shorting is always the better idea in that case. When it goes down, it goes down hard. When i goes up, it goes up sharp but usually corrects itself or goes down shortly after. I would rather go short than go long.

naw, i'd rather hear you try to explain to me how that would ever be beneficial.

You either think the stock you bought is gonna go UP or DOWN

which is it ??

>""""dip""""
what you think finances track in a str8 line?

fact is u cant predict the future, and if ur short goes bust, u got nothing to show for it.

You do it by setting stop losses in a particular way to mitigate loss and secure profit from small moves, usually following candlestick charts to get a hint at the next change.

>dip
You are still gambling that it is a dip and the price will go back up. If your short goes bust you set a stop loss so it doesn't. Then short it again. The kids making big bucks are all shorting. Why do you think big investors try and cause doubt? they want the price to dip.

Shorting involves the same mechanics as going long. The only practical difference is margin interest costs.
So your tl;dr is that you see the stock market as gambling.
That's pretty original.

Well the banks didn't short, they sold insurance on instruments everyone, including most bankers, thought were safe but weren't.

The ones shorting were the ones buying that insurance.

i'm not saying you cant make a boat load of cash from it . but i don't see the upside.

if your buying the dip in blue chip, market making stocks,
you can bet your bottom dollar it eventually gonna rise .

i mean hell , you can put a stop loss on a long position as well ....

I have never heard one billionaire investor advocate short selling btw . probably cause they have bad habits that eventually led to them all being fuckin ass out with not an asset to there name.

Should have known a day-trader wouldn't understand the complexity that was the mortgage-derivative markets in recent years.

Protip: some banks bought swaps against their own bonds and against their own derivatives. Goldman got in trouble for this.

NOOOO

in investing you receive a peice of the business , wether the stock price of the business rises or not, you still have a peice of the business.

not so in shorting.

thats the HUGE practical difference.


i'm not saying the banks shorted, im saying they sold bad packages just to make a quick buck, not thinking about the long term effect those bad packages failing would have on the integrity of the bank to do good business.

If you haven't hear of billionaires shorting then you weren't paying attention to George Soros leading up to brexit.

also

>i'm not saying you cant make a boat load of cash from it . but i don't see the upside.

whut

ok, your right, but soros is losing it

the upside isn't worth the downside, is what i meant.

>market making
I don't think you know what that means bud.

Take it from somebody who kept their job through the subprime crisis, all of our clients with any sort of appetite for risk back then wanted two things; subprime and volume. Everyone knew what we were doing, playing hot-potato with the volume turned to 11.

>thats the HUGE practical difference.
That's not a huge difference, it's just the opposite.
If a company's prospects are poor, you simply reverse the buying/selling order, as you don't want any liability, in fact, you want the opposite.

You have a piece of business but you still don't know if it is the dip or maybe the stock doesn't have a comeback.
Also you don't have to put so much money in the market if you go short so it's better for your liquidity cause you can build the same position with Options and futures like you would with buying shares. Shorting is clearly not risk free but there are reasonable facts to do so. Also you can buy cds for there really purpose and use them as insurance the same goes for other swaps.

And the other part is just the fact that the banks are greedy as fuck and thought the real estate market will be an ever running bull. But you are always smarter afterwards.

yea, i meant the stocks that drive the s&p, i didn't realize there was a more arcane definition of that euphemism.


why would you buy in the first place if you knew the companys prospects were poor...........

>why would you buy in the first place
>shorting
Do you understand how shorting works?

isn't it extremely rare that blue chip stocks would do anything but trend upwards over a long enough time line?????

yes. someone is trying to compare shorting

to buying long in a dip . and saying you are taking the same risk in both situations.


i absolutely understand how "selling" short works.

not to be a smart ass , but you dont "buy" short....

You know shorting has an unlimited amount of risk attached to it right? If you go long and you're wrong then the stock will drop to zero and you're done. If you short and you're wrong the stock can go to the fucking moon and you're still not done as long as you can post capital to meet margin requirements.

Why don't you ask Lehman Brothers, Bear Sterns, Washington Mutual, General Motors, Dell, etc.

So then you already understand why shorting doesn't involve "buying a company who's prospects are poor"?
That was confusing.

lol wot?


this entire thread really. just more Veeky Forums gold.

>Why don't you ask Lehman Brothers, Bear Sterns, Washington Mutual, General Motors, Dell, etc.


you forgot enron..

the fact that u can count them on one hand doesn't bother you?

Enron wasn't considered a blue chip stock. The price was low and everybody was sketchy about just how over-cooked those books really were. After all, they were the only financial services company at the time who couldn't produce a balance sheet or statement of cash flows for investors alongside an earnings report every quarter. Ask why, asshole.

Just have a look at the deutsche bank for example. Their stockprice were around 120$ before 2007 and now there are only 13$ left. You will always have companies that turn to ash and won't manage to get up again. Yahoo would be a good example too

>unlimited amount of risk

lol wot?

so there's no limit to the money I could lose? I could lose $900 trillion on a $100 short? or is there a limit after all?

this is our board for business and finance ladies and gentleman.

ok.
why?

yahoo is doing just fine.


deutsche bank has a net worth per share of like 40 and trades at 13, dont you think that somewhere down the line they will be able to sort it out, if they could sell all assets at 40$ per share??

yes technically you could lose that much on a short if your brokerage would allow you to make that trade. since i think it would ultimately fall to the broker if you couldn't pay.
thats why shorting so stupid.

lol u a dumb

...

I agree, but I also don't see amy difference between Buying and gambling, either..
(look at what GEVO did to a third of the retards on this board today, for example)

But I mean you can improve your odds by developing strategies that recognize patterns in how the market works or in how the economy works.

So yeah buying is gambling in about the same way that buying a peach from the store is gambling that you're not going to find a worm inside.

Granted, doing anything on the advice of, or following the example of this board is gambling in the traditional coins in a slot machine way.

Yahoo never got really back on the track after their stock crash together the bubble. Sure you might have made some money when stepping into then the price was low but in my opinion the stock had a little comeback because the markets went crazy because of the monetary policy of the fed and european central bank and not because yahoo did so well.

Don't know if the deutsche bank ever get back because of there terrible it infrastructure, high compensation cost for law issues and so on. There have a lot to do but have to deal with a stronger regulation in the area of capital requirements.

> You either think the stock you bought is gonna go UP or DOWN
Selling short is the instrument that earns your money when you believe that stock is going down, buying long is when you think its going up. It reduces the effects of downturns, as losses in markets can be to some degree be salvaged towards more conservative economic institutions.

sounds liek a lot of double talk for a way of saying

10 + 5 - 5 = 10

Are you retarded? Just because he only listed X stocks that doesn't mean they're the only Blue Chips that fucked up. They're are plenty of blue chips that nose dived.

What? Selling short is just an instrument, a way of making money. If you know that its probable for a sports team to lose or win a game, you can make money by betting for/against the team. Short/Long are logical equivalents to betting for/against here, except that calling it a gamble is incorrect as the bet is made on existing, rational information rather than luck.

compared to how many that didn't , though.

betting a sports team will win doesnt' grant you partial ownership of the sports team
so thats a bad analogy.

no offense but perhaps you still understand how stocks work.
its okay, i made you a power point presentation

You still don't get how buying and shorting are two sides of the same coin?
Look, in one you buy and are liable for movement in the price until you sell.
In the other, you sell and are liable for movement in the price until you buy.

Same trades, same amounts.
You would make the same amount (minus interest) shorting a decline as the long holder makes on an identical upswing.

>mfw I short 3x leveraged inverse ETFs

> I don't understand therefore gambling
> Now lets go buy the latest altcoin
Veeky Forums everyone

Op, you do realize that when one party "sells short" there is another party that is buying long, right?

what business is it of your's how people finance their trades? Should they call you and ask if it's okay to take a loan or if you'd prefer they use cash only?

Maybe Bernie could create a government call center to give oversight to "speculators"...

tastytrade.com/tt/shows/from-theory-to-practice/episodes/the-short-side-stocks-bonds-06-20-2016

Here's the mathematical rationale behind shorting.
Market price movement has Negative Skew and Positive Kurtosis.

Melt Ups happen way way less often than Melt Downs.

It generally takes everything going right for the price to drip higher. But it takes one thing to break down. Look at chipotle.

> Don't see the upside
of a boatload of cash made quickly.
of a position hedged against small to moderate loss.
Cost Basis Reduction
Non-Correlation

> OWNERSHIP
comes with costs of stewardship. Have you ever been through or seen a bankruptcy or liquidation. Take the recent Sports Authority thing. All those assets you have a claim to were sold at 50%-10% of present value and paid to Bond holders first. Equity is a massive risk and one of the riskiest positions you can have. Pure equity is almost always a guaranteed loss given enough time. Once your timeframes go beyond 100 years very few companies survived.
Its clear you haven't done the math on the risk.

Avg Market P/E is 12 currently it is 19. Regression to the mean is not a thing but if people are paying way too much today there is no sense in missing the opportunity to sell high.
buy low, Sell high & Sell High, buy low are the exact same position.

Or say you'd like to hedge say Frito-Lay, which you think is a fantastic company except for the fluctuation of corn prices. You'd buy frito-lay and sell corn. Now you own a position on that is insulated against random weather patterns and is just the marketing and distribution aspects of the business which you have come to love.

Buy the Dip, Sell the Rip.
No one here is advocating naked short selling of penny stocks.
We're saying its a tool, a great tool worth using. Any objections you have are personal. Maybe you couldn't pick a top with a gun to your kids head and "you" shouldn't short, same way some people can't see the dip.

>Look at chipotle
I sure did.
My CMG short made over a grand.

I had the opposite, lost 1200. That's a huuuuuge dip, can't go any lower.
>.
>..
>...
>....
> Its worse than anyone ever imagined
Shit.

but this is meaningless conjecture. Show us your position. We'll tell you how shorting can make it better, faster, stronger, more resilient, and hopefully more profitable.

I said that I would go long once it all blew over, but now I'm spooked.

Have you taken any calculus courses? Are you familiar with limits? A stock cannot go below 0 so that's the floor (you can only lose so much from being long and the stock dropping). A stock can go as high as the market will allow it (Berkshire Class A's for example, i don't care that it's a conglomerate just roll with it) so the position has an unlimited upside risk if short but a finite downside risk if long. Make sense?

Enron's slogan was "Ask Why?" and Jeff Skilling, on a fucking earnings call with investors, was asked:

>Analyst: You are the only financial institution that can’t produce a balance sheet or cash flow statement with their earnings…
>Jeffrey Skilling: You, you, you… Well, uh… thank you very much. We appreciate it… asshole.

And thus, "Ask Why, Asshole" was born.

With short you can end up in debt.
If you just buy and sell for more, you are not in risk of debt.

It is gambling. ETC was supposed to go up, and someone fucked up the price.

>Buy the Dip, Sell the Rip
You may think you are buying a dip, it starts going up then crashes more

its random as fuck, its impossible to know what is a trend

He is right. Shorting can end up in massive debt with he exchange. Its too much risk.

Ermagherd but what if you buy a stock and the seller you bought it from was a short-seller???!!!

If the stock value goes to the moon, you might be HURTING someone!

No thank you I'm a nice person I wouldn't want to profit off someone else's mistake. You would give the stock back to the seller for the original selling price, r-right user?

>Shorting involves the same mechanics as going long. The only practical difference is that your betting against the long-term trend of almost every industry

FTFY

Shares that are sold short are loaned from the broker to the investor directly. You're hurting no one.

>betting against the long-term trend
Which I could give a fuck less about since I'm not in long term.

> you're shorting the whole market.
hows the auto industry doing
hows the shipping industry doing
hows the Rail industry
Hows the construction industry doing
Hows Specialty Retail doing
Hows Consumer Retail doing

> You're shorting forever
Lets get the big down move and just not take profits and maintain our "unlimited" risk position forever.
That you can't go into a macy's and scan all the products with your phone and get them cheaper on Amazon. Then go to the next level and find superior products for even cheaper than that. And short Macy's, Nordstrom and Kohls, in order to buy the vastly superior amazon for significantly cheaper.

Are you retarded. Im talking about how you can go broke if you fuck up during your short.

I only want to risk the money im investing, if it goes to 0 then oh well, but lol at ending up in debt.

you can calculate your risk ahead of time. So just do that.

Stop arguing semantics. You know that you understand what that guy is saying, you just don't want to be wrong. Stop sperging out.

You are risking legit bankruptcy over a totally unpredictable market. Brb shorting while some whales decides to pump out of nowhere.

I'm not arguing semantics.
knowing rudimentary risk management will save you 99% of the time. Short 100 AAPL @ 100 b/c too high stop @ 101
$ 100 risked. done.

All the whales in the world combined yoloing might make this double in price for 1 day.

or shorting AMZN with a $10 avg daily range. short at sell 100 - 775 stop @ 780 $500 risked

or hedge with a call for for $1000

don't short penny stocks
Don't trade in sizes that can bankrupt you

Have a beta weighted delta neutral portfolio these are fucking risk management basics.

Don't YOLO shorting a volatile penny stock that anyone with 100,000 can make the market and you'll be good. Short those meaty blue chips who're getting wrinkly and fat, who can't move like they used to.

Definitely short Pets.com IPO @ $300 million valuation and get your piece.

why didn't they put the AAA bonds on the bottom of the stack....??????

are banks really this fuckin stupid?

thanks investopedia

If you short a stock and the price goes up and up, your brokerage will force your position closed when you hit your margin limit. Not recommended but yes it happens. This was a question you could have asked your brokerage or Googled it. so who's the retard?