Replies to post #36123 on Starfleet Innotech Inc (SFIO)

[Nightstalker22]

I am a neophyte when it comes to trading. I have never short sold.
My account is cash only. I believe you need $25-50k in your account ( with my broker ) to even be eligible for setting up a margin account.

It is my understanding though ( and I may be wrong ), that when you short sell, you are selling shares that you don't actually own. You are required to buy those shares at the end of the day, so there isn't a share inbalance.

So, if you sold @ $1.00, for example, then the shares closed @ $.9, you are required to purchase them at $.9. You already sold @ $1.00, so you made ten cents per share.

It is more risky than cash accounts, which is why brokers require someone with money to do it. If the shares closed @$1.10, and you had to buy at end of day, you're losing ten cents per share, and that would have to come out of your account.

Short sellers will not only short sell, but they'll actively purchase on the bid all day to try to keep the price lower than what they sold for. And they'll post on message boards all day trying to discourage you and get you to sell on the bid.