let's talk investing wrote:
Appreciate a lot of the responses!
So is the answer to my question, the simple fact that a brokerage house has to authorize someone to short a stock?
When you short a stock you're basically borrowing it against a future sale. Now isn't this all based on a brokerage house wanting to mitigate risk?
So the simple answer is that you won't be authorized to short the stock anymore
Anyway the stock went up 20 times in one month and there was no corresponding value actually being created by the company's so it's obviously not worth anywhere near it's price
But it seems like some of the basics are that brokerage houses make money off transactions and they also want to mitigate their risk
So by creating the concept of shorting they're accomplishing both of those goals. But they can also determine whether they will let you short a stock
And if someone else says it seems like they will not currently even let someone especially a new person without an established account start shorting this stock
I think electric cars, Battery Technology, and solar power are three great sectors to get into. Anyone have any pics of companies in those sectors?
What about Lordstown Motors? Symbol ride? GM just invested a lot, anyone familiar with their management team and Prospects?
the easiest thing to do is to call your brokerage and talk to them. Dial 1 800 669 3900 and yes, i know that number by heart. I see you have an ameritrade account as do I.
Hit 1 for client services.
They are really helpful.
They can talk you through what is allowed on your particular account, and i strongly believe it would need to be a margin account. Then they can tell you the margin requirements. I just looked it up and it is among the very highest level of margin requirements.
And some of the things you said are slightly off. There is a ton written about the mechanics behind brokerages restricting trading in certain stocks, the clearing houses that set the cash necessary to trade certain high risk stocks, and which brokerages are best suited to extended the float necessary to make market in volatile stocks like gamestop. Really, theres' a lot out there explaining it and a couple seconds of googling and 15 min. read will make you in the know.
But that said, let me do you a straight up solid and tell you: don't short this stock. You are most llkely going to get killed. This is not the place to cut your teeth.
I traded it maybe a dozen times last week, made a little once, lost a little a couple of times, and broke even a few times, all for a net very small inconsequential loss. Mostly i just wasted the time. And i would not dream of shorting it, truth be told.
Good luck. If you want to short something, try something less volatile and call Ameritrade, they will give you the straight scoop in a nutshell.