RE: [system-traders] Stock Market Terminology

[João Antunes Costa <Joao.Antunes.Costa AT cgd.pt>]

I think I get it.

The trade is reversed. I enter the trade selling, and exit buying.

I guess the broker must do a lot of juggling for that to work, but it's a powerfull concept.
That's how one can make money when markets are going down. Quite interesting.

Thanks Oliver.

-----Original Message-----
From: Oliver Bossert [mailto:olf
AT
olfsworld.de]
Sent: Wednesday, April 28, 2004 2:06 PM
To: system-traders
AT
geniustrader.org
Subject: Re: [system-traders] Stock Market Terminology


Hi, 

> What about short trades?  From what I've been reading, I get the
> impression that when you enter a short trade, it means to sell the
> stock you already have.  Then after price falls, you exit the short
> trade, and that means you buy the stock again.

It sounds complicated but it's easy: Entering a short trade means 
that you sell a stock that you _don't_ (!) have. 

When you short a stock, you're betting that the stock is going down. 
For example, you notice that XYZ will go down you short the stock 
when it is at $100; the you cash out when it is at $90.
You ,made 10% on your money. 

It depends on your broker if, which stocks and for what conditions 
you can short.

CU, Olf
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