Good response to your question Mike from Bryan.
I NEVER go short - even though I'm absolutely convinced that either the actual stock - or that "industry" is going down. I simply can't get that deeply involved in their financials - or follow something that closely. That takes WORK - and is best left to very savvy investors. The minute you short something -- some company in their industry will announce a take over at a premium price -- and you get KILLED. This is what I mean by - I can't follow something that closely.
I have, however, sold "short against the box" --- meaning --- The shares I intend to "short" are already held in my account.
So -- I might have 1000 shares of something -- I feel -- or have read news -- that I don't like that might cause the shares to go down (I THINK) -- so maybe I sell 500 shares (or even the full 1000) "short". Collect the cash.... NOW - I at least know my cost for the replacement shares when I "cover" the short.
All in all -- this is not a strategy to play unless you're a real gambler. I don't understand why anyone (except a pro) is going to want to bet against a company doing well.... by shorting them hoping they'd do poorly. I prefer just to buy shares in a company I think is going to do well long term and pays me a dividend.
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