how do I short truth social on monday? I have never shorted a stock before

[prodigitalson]

[mahatmakanejeeves]

1. Stay away. It's like arguing with a troll.

You’re not going to win.

[prodigitalson]

2. that stock is gonna get way overvalued for a real short period of time

it's expected to hit the market at 40 dollars a share.

it'll be a penny stock in days

[MLAA]

4. I'd go through a stock broker

[prodigitalson]

8. I've got a schwab account I can place the trade myself. I just don't know the basics of a short sale

I wanna short like a hundred bucks worth of it.

[Trekologer]

15. No offense but if you have to ask, you probably shouldn't

Last edited Fri Mar 22, 2024, 06:57 PM - Edit history (1)

Shorting the stock means selling shares at today’s price that you borrow with the promise to buy the same number of shares in the future at whatever price it is. If the stock goes down, you make the difference in profit. If it goes up, you owe that difference and potentially that loss is unlimited.

Edit: Here's why the loss is unlimited.

DWAC closed at $36.94 today. Let's say that on Monday, you shorted 100 shares of the stock. You borrow 100 shares and sell them on the open market for $3,694. If the share price goes down to, say $30, you cash in your position which means you buy 100 shares at $30 each to replace the borrowed ones, netting you $694 (minus whatever fees your broker charged you). But let's say the share price goes up to $40 (and in after hours trading so far today, it actually has gone up). You now owe your broker $306 to close out your position.

You could hold onto your contract and hope that the share price goes back down but your broker will charge you fees and interest. There's a saying that the stock market can stay irrational longer than you can stay liquid. What happens if the stock continues to go up? There are likely plenty of potential bag-holders who think they're going to get rich off of poopy suit's deal that could keep buying shares to prop the price up. Let's say they're able to pump the share price up to $50. That's now a $1,306 loss for your 100 share short contract.

[FHRRK]

21. This

I get the sentiment, but I’m guessing you worked hard and earned the money.

[Mountainguy]

35. Biggest takeaway

Is that your losses in a short are unlimited.

A $100 short could theoretically result in a $1,000,000 loss.

[calguy]

28. You first need to gave a margin account to short a stock

And there will be a waiting period before a stock like this can be shorted. Call Scwab and I'm sure they'll be glad to explain it all to you. It's their job.

If you're wanting to short a hundred bucks worth, it's not worth the hassle. The most you'll make is a hundred bucks, ONLY if the stock goes to zero, which is unlikely.

[kerry-is-my-prez]

26. Stock Brokers are sales people who earn commission

Don’t go through them unless you know exactly what you’re doing. Better to open an account at a reputable place that is bound to be responsible for your money (a fiduciary). An investment company. I think Vanguard might do that. Fidelity no longer will act as a fiduciary. Otherwise, you would also want to wait a few days or weeks to buy at the absolute rock bottom. Even then, you would want to know that there is a chance the stock will go up in the future. Like maybe Elon Musk or someone else is going to pump money into it.

[WarGamer]

6. doubtful... I think it'll be worthless AFTER the election.

Until then... anyone can buy th estock to pump it up... including the Saudis, Russians, Musk... anyone.

And it's a relatively small daily volume so easy to manipulate.

[prodigitalson]

9. I think that's right but it'll eventually crash to almost nothing

[WarGamer]

10. If Trump loses... it won't be worth the old gum on the floor of the restroom at a Grateful Dead concert.

[Lochloosa]

33. There's residuals in that gum. Not so much in the stock.

[Turbineguy]

3. There's a rule about shorting.

If you go long, there is a limit on how much money you can lose. All of it. When you go short, there is no limit on how much you can lose.

And as George Carlin said, "Never underestimate the power of idiots acting in large groups.

[Trekologer]

17. And the stock market can stay irrational longer than you can stay solvent

DWAC is grossly overvalued. But you can’t predict when it will come crashing down.

[getagrip_already]

20. This - you can lose an unlimited amount of money if the stock goes up quickly

This is a cult stock. It's price won't be tied to the performance of the company itself. People will buy it to support the orange anus.

There are tens of millions of people with money to throw at that pile of kaka.

You can get badly burned by a highly volatle stock like this.

Leave it alone. It will die on it's own. Eventually.

The time to short it will be when trump starts to sell his shares. He owns 90+%. If he successfully dilutes the shares, he will own 99%.

He doesn't want to own shares, he wants cash. He will sell. Once he does, the price will crash. The market will not be able to sustain that volume of shares at any reasonable price and it will crash.

While he is in the lockout phase, there will be a limited number of shares in the market, and they will be expensive.

[Turbineguy]

38. You got that right.

Creating an artificial shortage is the hallmark of these.

[WarGamer]

5. I'm a daily stock/options trader...

You'd have to open a brokerage acct and have the $ to cover the stock.

For 1000 shares you need $40k ish

If it goes to 35 you can close your position for +5000

If it goes to 45 you are -5000

It's way too early to short it.

It's literally a MAGAT slush fund now. Foreign entities and billionaires can pump the stock up til election day.

If Trump loses, his usefulness will be NADA and the stock will be WORTHLESS.

But stay away until closer to the election. It's going to be volatile and be up and down until then.

[MLAA]

12. Thanks for the insight!

[prodigitalson]

13. I'm talking about 200-250 bucks in my Schwab account I play with

[WarGamer]

16. then if you nail it, just right you might make $20

[prodigitalson]

18. ok... that answers my question

[Prairie_Seagull]

14. Did some work for Wade Cook back in the day.

Just never caught the options bug. Would ruin by blood pressure. ha

[jmbar2]

7. Shorting a stock is hard if you haven't done it before.

The stock he's merging with is DWAC. Not sure what the symbol will be for the new merged company, but it will be horribly manipulated. It is basically a pump and dump which makes it dangerous to trade.

You could buy puts on DWAC, but you have to have a brokerage account with options approval first.

To short, you basically have to borrow shares from a market maker and put up collateral in case the trade goes against you. You could also wait for it to nosedive, and then try to buy a few shares for a dead cat bounce.

[prodigitalson]

11. so I can't just say short a couple of hundred bucks worth of it when it is like 50 bucks a share

then just wait until it's like two dollars, which will eventually happen?

[WarGamer]

19. if you short 4 shares at 50... and it dips to 3...you can make $188

Except if it takes a year... youll pay interest daily on holding the short shares.

[prodigitalson]

22. not a bad return. what would the interest be in a year do you reckon?

[WarGamer]

23. The interest rate is a point or two over the Fed Funds rate... maybe 6-7%?

compounded daily.

[prodigitalson]

24. so less than 20 bucks?

no, more like 40?

[WarGamer]

25. yeah.

You'll be required to keep a balance in your margin acct 150% the size of the short position.

If the price of the stock shoots up, the broker will issue a margin call, requiring you to deposit more money in case you lose too much.

[prodigitalson]

27. OK, that'll be fun. At 50 bucks a share I could short four shres wiith 300 bucks to cover a margin call

what If it goes crazy high like 200 bucks one day?

and I don't have the money to cover that

[MichMan]

29. You would still owe the difference I believe

[WarGamer]

30. then they close the account or take money from your other holdings

Like if you have other stocks in your portfolio?

[prodigitalson]

32. yikes

[Hassin Bin Sober]

34. You could always buy Puts.

Less risky.

[no_hypocrisy]

31. This is sort of how it's done:

[Zo Zig]

36. Puts/Calls

Contacts that give you the right to sell or buy the stock at a set price. Listed as opitions, buy contracts of 100 shares, pricing based on stock price movement. The contact has two component that have value, time to expire and premium/discount. Can sell prior to expiration if it goes up or down, lost would be cost of contract and commission, profit anything over cost.
Good luck.


Edit- if you own the stock and wish to stock it that is a different type of trade. Dont have to own to bet on the price change. That's what options prvoide.

[SunSeeker]

37. Get in line.

The price of shares in Digital World Acquisition Corp. closed trading Friday nearly 14% lower than their opening price after the shell company's shareholders approved a merger with the social media company owned by former President Donald Trump.

DWAC had opened the trading day at $44.20 per share, but quickly tumbled on the heels of the vote.

A total of 11% of the tradable shares of DWAC are being sold short, FactSet data shows.

This means investors holding these positions are betting the price will fall before they have to buy the shares back and return them to the entities who loaned the shares to them.

https://www.cnbc.com/2024/03/22/trump-social-dwac-stock-falls-after-merger-approved.html

[former9thward]

39. So did you short the stock today?

How much money did you make?

[WarGamer]

40. He's on the phone with his broker... something about a margin call