Shorting stocks

Discussion in 'Order Execution' started by chuckie, Dec 1, 2003.

  1. chuckie


    What is the minimum number of shares you can short? Do you have to short in batches of 100 shares?

    What's the alternative if that's the case? That is too many shares for me at this stage.

    Thank you.
  2. there is no minimum for how many shares you can short. Though most people prefer to deal in round units (ie 100 shares) there is no law against buying or selling odd lots. I'm sure someone with their 7 will correct me if I'm wrong. Some stocks are designated "Hard-to-Borrow" (HB) which means you can't borrow from someone in order to short them. These HB stocks are often "thin" stocks or cheap - less than $5.
    Hope this helps.
  3. qazmax


    Not sure what rule apply, but IMO most firms will not allow short sales in odd lots.

  4. IB allows it.

  5. perhaps "chuckie" should consider a different line of work.
  6. gam1111


    I heard married puts have been eliminated. Is that being enforced?

    How's that affecting shorting of stocks?

    Is the strategy of shorting stocks down significantly for day traders?
  7. qazmax


    Married puts have not been eliminated. The only thing eliminated is unlisted married puts for the use of creating bullets (deep in the money puts that expire that same day - no real security just a book entry)

    Not sure how this affecting shorting stock... I would imagine it made it slightly harder to short stock everything else held constant. Traders that used to sell long stock when they were really shorting stock now have to enter legitimate shorts creating more scarcity.

    Just a thought no real data on that...

  8. DaveN


    It's true, yes, as far as married puts being used for bullets, they have been eliminated. I don't know of any enforcement actions yet, but as far as I know, any firm that used to offer them doesn't any longer. So, it's unlikely that traders can even get them, let alone use them illegally.

    Well, technically, when a trader owns a bullet, he or she is selling the stock, not shorting it. I'm the type of trader that is shorting while the market is moving up into me, so I haven't noticed any more difficulty in getting short. But I think what you are asking is referring to traders trying to get short on a downmove without a bullet. I'd speculate that it's been a tradeoff between fewer short term sellers because of the elimination of bullets and more traders trying to short a stock as it's falling. I'm not sure; hopefully, someone who uses that style of trading will have more insight than I do.
  9. I have heard complaints from some traders at one prop firm that they couldnt hit bids with long positions....because the firm was Net short, the sale of the long would create an illegal short sale so it had to be done on an up tick......NOW THAT SUCKS!

    I dont know what the solution for the ex-bullet traders is...learn more NASDAQ stocks? "Traditional" shorting of listed equities takes ALOT of skill, and you always suffer pain first.....the ES/NQ are different animals, I can't quantify this...but since bullets were eliminated, they seem "crowded" with shorts, holding them up longer, untill they slowly give up.....anyone else noticing this?

    As a historical anectdote...Livermore said the augment of the uptick rule is what did him in......he couldn't adjust.