Yellow | YRCW Files Amendment To Form S-3 Registration Statement With SEC On 3/17/14!
- Thread starter Freightmaster1
- Start date
Except for newly issued shares, all shares are already bought.
TC1, since you have Internet access, go here and learn:
Short Selling: What Is Short Selling? | Investopedia
Short selling is the selling of a stock that the seller doesn't own. More specifically, a short sale is the sale of a security that isn't owned by the seller, but that is promised to be delivered. That may sound confusing, but it's actually a simple concept. (To learn more, read Benefit From Borrowed Securities.)
Still with us? Here's the skinny: when you short sell a stock, your broker will lend it to you. The stock will come from the brokerage's own inventory, from another one of the firm's customers, or from another brokerage firm. The shares are sold and the proceeds are credited to your account. Sooner or later, you must "close" the short by buying back the same number of shares (called covering) and returning them to your broker. If the price drops, you can buy back the stock at the lower price and make a profit on the difference. If the price of the stock rises, you have to buy it back at the higher price, and you lose money.
Yes, borrowing shares creates demand just like buying shares. Demand is what raises the price of a share of stock short term. It's the same end result. When ever you buy or sell stock, it still comes out of someone's inventory, your's or someone else's. It's the samething. If you think the price doesn't rise initially when short sellers move in you're wrong.
Again, your analogy that the company is doing the right thing because they've had a short price increase in the stock is bad one.
Gotta go to work. Have a great day.
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My investment portfolio looks pretty good. I can only hope the same for you.
I'm truly glad to hear that. Mine is also. I seriously suggest you try to better understand what shorting a stock means. Do a search on shorting stock (the Investopedia site in my earlier post is quite good) as I think in all seriousness that you slightly misunderstand what shorting a stock actually means. Good luck.
That's because you are under the impression that shorting a stock is different than owning it when the only real difference is in how it's paid for. When you short X# of shares of stock you pull that many shares off the market for a set period of time just like buying them. This has a tendency to increase the price of the available shares causing the price to rise. When you short sell your "borrowed" stock you glut the market and the price per share tends to drop further after the sale. This happens because the majority of stock shorters are huge financial institutions buying/borrowing huge blocks of stock on small margins. Usually more than one smells blood in the water.
It's supply and demand at work. Less available shares = higher price, more available shares =lower price. When short sellers move in the stock will usually get a boost in price. When they move out (if they guessed correctly) you usually get a lower price caused by thier actions.
It's supply and demand at work. Less available shares = higher price, more available shares =lower price. When short sellers move in the stock will usually get a boost in price. When they move out (if they guessed correctly) you usually get a lower price caused by thier actions.
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