The Opposite Of Short Selling.

[Nole Ksum]

I've heard of the bear selling TSLA short but I've just kind of doing the opposite of short selling. I'm a totally novice, never traded a single stock in my life but TSLA has been dipping so low that some expert said it's a good buy. So I opened an account with Ameritrade just a few days ago, bought all the TSLA I could buy (at 205.868/share) with half of my saving. Today, I look around in my Ameritrade account and found that it says I have some dollar amount available for trading (equivalent to a little over a half of the stock I own.) So use that amount to buy TSLA at 225/share. My balance went negative by about the same amount. Then I remember someone has advised that we should prevent the shortsellers from getting their hand on our Tesla shares. So I placed an order to sell all my TSLA (including the 50% I bought on margin) at $5000 with All-Or-None condition on the order. So not only I prevent the shortsellers from selling the shares I actually own free and clear, I also protect 50% more shares from the short. I am right? Is the advice valid? I wondered if the standing sell order actually set the shares aside and remain untouched.

 

[Wooloomooloo]

I've heard of the bear selling TSLA short but I've just kind of doing the opposite of short selling. I'm a totally novice, never traded a single stock in my life but TSLA has been dipping so low that some expert said it's a good buy. So I opened an account with Ameritrade just a few days ago, bought all the TSLA I could buy (at 205.868/share) with half of my saving. Today, I look around in my Ameritrade account and found that it says I have some dollar amount available for trading (equivalent to a little over a half of the stock I own.) So use that amount to buy TSLA at 225/share. My balance went negative by about the same amount. Then I remember someone has advised that we should prevent the shortsellers from getting their hand on our Tesla shares. So I placed an order to sell all my TSLA (including the 50% I bought on margin) at $5000 with All-Or-None condition on the order. So not only I prevent the shortsellers from selling the shares I actually own free and clear, I also protect 50% more shares from the short. I am right? Is the advice valid? I wondered if the standing sell order actually set the shares aside and remain untouched.

Basically yes, if they are "on order" for a specific price, they can't be shorted. Obviously short sellers can't sell shares that don't exist or available for sale as they have to borrow them in order to "sell" them short.

Someone else can explain this better, but just be aware that is the price drops your average cost basis of your holdings, you could face a margin call.

 

[Sudre]

Unless you plan on your broker selling your shares for you on the next TSLA dip you need to have cash in hand to cover that margin. With TSLA I have found margin useless since you have to keep cash aside anyway.

Remember for no reason at all you can wake up tomorrow and TSLA will be down 10% because of some FUD article. At that point you will be in a margin call the next day and have to sell or deposit more money. It also just takes one Tweet from the evil genius President.

Just a fair warning.

 

[albtrssp]

OMG, don't start messing with buying on margin. You could end up in deep trouble quickly.

And with 170-odd-million shares outstanding, you're not going to make any difference in the short selling market.

 

[LN1_Casey]

Basically yes, if they are "on order" for a specific price, they can't be shorted. Obviously short sellers can't sell shares that don't exist or available for sale as they have to borrow them in order to "sell" them short.

Someone else can explain this better, but just be aware that is the price drops your average cost basis of your holdings, you could face a margin call.

I was under the impression that short sellers have to request to borrow the shares held by persons, and those persons have to agree to it. They're then offered a borrowers fee to lend them out, regardless if the shorts make money or not.

So unless the Long agrees to it, the more stocks they buy the fewer there are available to short?

 

[ggr]

I've heard of the bear selling TSLA short but I've just kind of doing the opposite of short selling. I'm a totally novice, never traded a single stock in my life but TSLA has been dipping so low that some expert said it's a good buy. So I opened an account with Ameritrade just a few days ago, bought all the TSLA I could buy (at 205.868/share) with half of my saving. Today, I look around in my Ameritrade account and found that it says I have some dollar amount available for trading (equivalent to a little over a half of the stock I own.) So use that amount to buy TSLA at 225/share. My balance went negative by about the same amount. Then I remember someone has advised that we should prevent the shortsellers from getting their hand on our Tesla shares. So I placed an order to sell all my TSLA (including the 50% I bought on margin) at $5000 with All-Or-None condition on the order. So not only I prevent the shortsellers from selling the shares I actually own free and clear, I also protect 50% more shares from the short. I am right? Is the advice valid? I wondered if the standing sell order actually set the shares aside and remain untouched.

1. It sounds like you have somehow opened a margin account. I strongly advise that you do not trade on margin with your level of knowledge. In other words, sell those additional shares, and make sure that you have a positive balance (no matter how small) in your account. Yes, this IS advice.

2. I believe that the last part about placing a sell order is folklore, and incorrect. According to @ihor3 on twitter (Ihor Dusaniwsky, who seems to know more about short selling than pretty much anyone) they can lend stock up to the value that you have borrowed on margin, whether there's a sell order or not.

3. Don't trade on margin until you have a lot more experience.

4. See (3).

 

[ggr]

I was under the impression that short sellers have to request to borrow the shares held by persons, and those persons have to agree to it. They're then offered a borrowers fee to lend them out, regardless if the shorts make money or not.

So unless the Long agrees to it, the more stocks they buy the fewer there are available to short?

Sort of.

If you have a margin account you have already agreed to lend out shares, and you get nothing back for it.

If your account is not a margin account, yes, you can offer your shares to be loaned out, and you get paid interest by the borrower; they are not available to be loaned unless you do this.

 

[Wooloomooloo]

I was under the impression that short sellers have to request to borrow the shares held by persons, and those persons have to agree to it. They're then offered a borrowers fee to lend them out, regardless if the shorts make money or not.

So unless the Long agrees to it, the more stocks they buy the fewer there are available to short?

No, because it's the broker who is doing the lending, not the client/investor. This is usually in the margin terms or other terms.

The borrower won't know where the shares are coming from necessarily, and the share owner won't know either - whether it's your particular shares or someone else's is entirely random as I understand it.

 

[LN1_Casey]

Sort of.

If you have a margin account you have already agreed to lend out shares, and you get nothing back for it.

If your account is not a margin account, yes, you can offer your shares to be loaned out, and you get paid interest by the borrower; they are not available to be loaned unless you do this.

I do not have a margin account, and I have not--to my knowledge--authorized lending of my shares. Now, I only have 24, so I'm not exactly a large mover of stocks, but I was hoping to pick away at the available short pool as much as I could. So I'm glad that is not an automatic thing.

 

[TradingInvest]

1. It sounds like you have somehow opened a margin account. I strongly advise that you do not trade on margin with your level of knowledge. In other words, sell those additional shares, and make sure that you have a positive balance (no matter how small) in your account. Yes, this IS advice.

2. I believe that the last part about placing a sell order is folklore, and incorrect. According to @ihor3 on twitter (Ihor Dusaniwsky, who seems to know more about short selling than pretty much anyone) they can lend stock up to the value that you have borrowed on margin, whether there's a sell order or not.

3. Don't trade on margin until you have a lot more experience.

4. See (3).

Agreed with those points. In addition, if you have both long term shares and short term trading shares, you need to know which lots you are selling. FIFO or LIFO or pick your lot to sell. Also watch for wash sell. If you are new to stocks, try to keep it simple. Learn about tax. I keep Tesla shares as long term investment and trade other things so there is no confusion.

 

[MikeC]

I've heard of the bear selling TSLA short but I've just kind of doing the opposite of short selling. I'm a totally novice, never traded a single stock in my life but TSLA has been dipping so low that some expert said it's a good buy. So I opened an account with Ameritrade just a few days ago, bought all the TSLA I could buy (at 205.868/share) with half of my saving. Today, I look around in my Ameritrade account and found that it says I have some dollar amount available for trading (equivalent to a little over a half of the stock I own.) So use that amount to buy TSLA at 225/share. My balance went negative by about the same amount. Then I remember someone has advised that we should prevent the shortsellers from getting their hand on our Tesla shares. So I placed an order to sell all my TSLA (including the 50% I bought on margin) at $5000 with All-Or-None condition on the order. So not only I prevent the shortsellers from selling the shares I actually own free and clear, I also protect 50% more shares from the short. I am right? Is the advice valid? I wondered if the standing sell order actually set the shares aside and remain untouched.

Ironically, by buying on margin, you've now made all your shares available for short sellers. Even the original ones you bought with your cash - those were safe until you bought on margin.

 

[tander]

Margin is great but I wouldn't do it casually. Also I wouldn't worry about trying to effect short-sellers, you are likely not working with numbers that would make a difference, and if you were it might be considered market manipulation.