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It appears that at least some of the time, the shares are delivered many weeks after the transaction date instead of the required 3 days. This would give the se
by alex_h 17y ago
It appears that at least some of the time, the shares are delivered many weeks after the transaction date instead of the required 3 days. This would give the seller of the stock time to wait until the price had fallen before acquiring the stock and giving it to you to settle the transaction. However, I'm not sure how this would work when the number of promised shares far exceeds the actual number that exist.
I would love to hear if anyone knows how this works.
- michaelbuckbee 17y agoShorts are really contracts to buy and sell shares at a future time, not actually shares themselves. So, at some future point money has to change hands, not actual shares. Think of it like a bet. If next Friday the share price is over a $100, I'll pay you the difference between whatever the price on the open market is and if it's less than $100 you pay me the difference.
- brown9-2 17y agoI think you are confusing short selling with options.
- yangyang 17y agoWell what he describes isn't how options work either, it's more like futures (assuming his $100 was the futures price for next Friday).
- barrkel 17y agoShares really do change hands: witness Porsche's market manipulation of hedge funds: http://www.thisismoney.co.uk/markets/article.html?in_article_id=481379&in_page_id=3 http://www.thisismoney.co.uk/markets/article.html?in_article...