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Please don't take this as snark but I wouldn't recommend shorting anything if you are so inexperienced that you don't have a trading account or don't know which

Please don't take this as snark but I wouldn't recommend shorting anything if you are so inexperienced that you don't have a trading account or don't know which one to use. Shorting stocks is extremely risky and should only be done by traders with lots of experience. If you really want to bank on Twitter going south, you can try buying puts when they're available. If you're not sure what puts are, leave this whole idea alone.

cft 13y ago
i run a bootstrapped company that i founded in 2006, and i have some extra money i am totally comfortable of losing entirely. i view this as an experiment. i am looking for a serious practical advice.
- MichaelApproved 13y ago
  I would still recommend against it but you should know that shorting isn't always available right after a stock IPOs. It can take about a month before its possible. Its been a while since I've dealt with IPOs so I'm not 100% sure if that's the case anymore. If you want to get involved, call TD Ameritrade. They can give you 100% accurate information and get you setup quickly.
- derwiki 13y ago
  But that's exactly the danger with shorting, your losses aren't capped by what you put in. A stock can only drop to 0, but it can go up to whatever -- you have no upper bound on losses. Do whatever you want, but know what you're doing. http://www.investopedia.com/university/shortselling/shortselling3.asp http://www.investopedia.com/university/shortselling/shortsel...
- grmarcil 13y ago
  Consider this carefully: "When you are a long a stock, the most you can lose is the amount you paid. When you are short, you can lose unlimited money." If you have "funny money" that you aren't afraid to lose, there are safer and more responsible ways to experiment with the market than unprotected short positions. You may want to read about and understand some options strategies: http://www.investopedia.com/terms/b/bearputspread.asp http://www.investopedia.com/terms/b/bearputspread.asp http://www.investopedia.com/terms/b/bearcallspread.asp http://www.investopedia.com/terms/b/bearcallspread.asp Either one of those strategies gives you the opportunity to profit a certain amount if the stock actually goes down (the width of the spread times the quantity), while limiting your exposure to just the premium you pay for the options. Your exposure is limited because you both buy and sell puts or calls for equal amounts of the underlying, so you have no net exposure to the price of the underlying. A general word of advice about playing the market for short term gain: big guys make money off of little guys. You may win some, but usually you are doing damn well as a small time trader if you're batting above 500 at all.
  - MichaelGG 13y ago
    Or you can buy puts and the most you're out is the amount you paid for the option. If you're looking to play around with some money - basically playing a gambling game with companies - then options are a fun little game and you can manage your downside perfectly.
- sfbsfbsfb 13y ago
  Again, friendly advice. This attitude guarantees that you will lose all your money. If not shorting TWTR then on the next deal. If the money is burning a hole in your pocket then give it to a worthy charity. If you are interested in the stock market then you need to read some books, discover a trading style that matches your personality and life situation, learn capital management, watch price movement until nothing surprises you and most important of all, overcome your psychological money demons (EVERYONE has them).
colinbartlett 13y ago
To add to this, just remember one simple fact: When you are a long a stock, the most you can lose is the amount you paid. When you are short, you can lose unlimited money.
- giarc 13y ago
  I don't trade stocks, nor do I claim to know that business at all. Can you explain this concept?
  - bcbrown 13y ago
    A short is borrowing stock to sell, promising to re-buy that stock in the future to give back to the lender. The stock price can rise arbitrarily high, which means you may have to pay an arbitrarily high price to re-purchase the stock in the future. See "short squeeze" and read about the Volkswagen/Porsche example a couple years back.
  - scotch_drinker 13y ago
    If you buy a stock at 10 and it goes to zero (the bottom limit), all you lose is your $10. If you short a stock (thinking it's price will go down), there is no upper limit on how far it can go up. If it continues to go up, you're going to lose the amount of money at which you eventually "buy to cover". For example, if you hold your short until the price is $100, you lose $90.
    - giarc 13y ago
      Could you not hold forever?
      - minimax 13y ago
        No. As the value of the position (price times size) approaches the cash balance in your brokerage account, your broker will close out your position (buying back the shares) using the funds in your account. This is known as a "margin call."
  - 13y ago

cft 13y ago

i run a bootstrapped company that i founded in 2006, and i have some extra money i am totally comfortable of losing entirely. i view this as an experiment. i am looking for a serious practical advice.

MichaelApproved 13y ago
I would still recommend against it but you should know that shorting isn't always available right after a stock IPOs. It can take about a month before its possible. Its been a while since I've dealt with IPOs so I'm not 100% sure if that's the case anymore. If you want to get involved, call TD Ameritrade. They can give you 100% accurate information and get you setup quickly.
derwiki 13y ago
But that's exactly the danger with shorting, your losses aren't capped by what you put in. A stock can only drop to 0, but it can go up to whatever -- you have no upper bound on losses. Do whatever you want, but know what you're doing. http://www.investopedia.com/university/shortselling/shortselling3.asp http://www.investopedia.com/university/shortselling/shortsel...
grmarcil 13y ago
Consider this carefully: "When you are a long a stock, the most you can lose is the amount you paid. When you are short, you can lose unlimited money." If you have "funny money" that you aren't afraid to lose, there are safer and more responsible ways to experiment with the market than unprotected short positions. You may want to read about and understand some options strategies: http://www.investopedia.com/terms/b/bearputspread.asp http://www.investopedia.com/terms/b/bearputspread.asp http://www.investopedia.com/terms/b/bearcallspread.asp http://www.investopedia.com/terms/b/bearcallspread.asp Either one of those strategies gives you the opportunity to profit a certain amount if the stock actually goes down (the width of the spread times the quantity), while limiting your exposure to just the premium you pay for the options. Your exposure is limited because you both buy and sell puts or calls for equal amounts of the underlying, so you have no net exposure to the price of the underlying. A general word of advice about playing the market for short term gain: big guys make money off of little guys. You may win some, but usually you are doing damn well as a small time trader if you're batting above 500 at all.
- MichaelGG 13y ago
  Or you can buy puts and the most you're out is the amount you paid for the option. If you're looking to play around with some money - basically playing a gambling game with companies - then options are a fun little game and you can manage your downside perfectly.
sfbsfbsfb 13y ago
Again, friendly advice. This attitude guarantees that you will lose all your money. If not shorting TWTR then on the next deal. If the money is burning a hole in your pocket then give it to a worthy charity. If you are interested in the stock market then you need to read some books, discover a trading style that matches your personality and life situation, learn capital management, watch price movement until nothing surprises you and most important of all, overcome your psychological money demons (EVERYONE has them).

colinbartlett 13y ago

To add to this, just remember one simple fact: When you are a long a stock, the most you can lose is the amount you paid. When you are short, you can lose unlimited money.

giarc 13y ago
I don't trade stocks, nor do I claim to know that business at all. Can you explain this concept?
- bcbrown 13y ago
  A short is borrowing stock to sell, promising to re-buy that stock in the future to give back to the lender. The stock price can rise arbitrarily high, which means you may have to pay an arbitrarily high price to re-purchase the stock in the future. See "short squeeze" and read about the Volkswagen/Porsche example a couple years back.
- scotch_drinker 13y ago
  If you buy a stock at 10 and it goes to zero (the bottom limit), all you lose is your $10. If you short a stock (thinking it's price will go down), there is no upper limit on how far it can go up. If it continues to go up, you're going to lose the amount of money at which you eventually "buy to cover". For example, if you hold your short until the price is $100, you lose $90.
  - giarc 13y ago
    Could you not hold forever?
    - minimax 13y ago
      No. As the value of the position (price times size) approaches the cash balance in your brokerage account, your broker will close out your position (buying back the shares) using the funds in your account. This is known as a "margin call."
- 13y ago