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What is Short Selling? Why do Investors Short Sell?

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Jake Broe

Jake Broe

Күн бұрын

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This video is for entertainment purposes only. I am not in any way acting as an agent or representative of the Department of Defense or United States Federal Government when presenting this information. I am not a legal or financial expert or have any authority to give legal or financial advice. While all the information in this video is believed to be accurate at the time of its recording, realize this channel and its author makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this video.
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Пікірлер: 76
@JakeBroe
@JakeBroe 4 жыл бұрын
Thanks for watching everyone! Give this video a LIKE if you found it helpful. I appreciate it! Also in my next video I do a live example of short selling in my Schwab brokerage account. Check out here, kzfaq.info/get/bejne/pNaiYMxkrd_cp3U.html
@bobbyhernandez859
@bobbyhernandez859 2 жыл бұрын
I didn’t want to short sell Jake because I didn’t want to contribute to a company’s downfall but after doing some research and watching your videos regarding this topic you made my decision more clear and easy. Thank You 🙏🏽 You continue to be a good guide through this journey.
@MT-qq1rq
@MT-qq1rq 3 жыл бұрын
You make this short selling trade strategy with risk and reward very easy to understand. Much appreciated Jake!
@JakeBroe
@JakeBroe 3 жыл бұрын
Awesome! Glad you found this video and got use from it Mike! Cheers!
@bymilliebphotography8249
@bymilliebphotography8249 3 жыл бұрын
Probably the best & easiesr walkthrough of short selling. As a beginner, this is not the easiest concept to comprehend, so this video is a must see introdection. Great job!!
@JakeBroe
@JakeBroe 3 жыл бұрын
Thanks so much Millie! I thought it was a good introduction video as well, haha. Hopefully more people find it!
@BlakeFealy
@BlakeFealy 4 жыл бұрын
Honestly, you deserve more subscribers. Please do a Patreon.
@JakeBroe
@JakeBroe 4 жыл бұрын
Haha, thanks so much Blake! Yeah, I don't know what I am doing wrong. I think I should have more subs, lol. Good thing I am not easily discouraged and I have a million ideas of topics to post on. So I am just going to brute force KZfaq with more videos until something catches on. As for Patreon, I would do one if I left the military and did KZfaq full time, but I am honestly not trying to sell anyone anything. My income is secure. I just like learning new things and teaching others. Feel free to share my content, I think that helps!
@BlakeFealy
@BlakeFealy 4 жыл бұрын
@@JakeBroe super helpful man, I will keep promoting you to all my friends. Thanks for all your knowledge.
@dsmith56
@dsmith56 2 жыл бұрын
Thanks for explaining the logic behind not wanting to short sell for a long period of time.
@lagaleven1506
@lagaleven1506 4 жыл бұрын
Great walkthrough of short sale. I learned a lot.
@JakeBroe
@JakeBroe 3 жыл бұрын
Thanks for watching Lagaleven! I appreciate the support!
@emilyforeman2646
@emilyforeman2646 4 жыл бұрын
It's interesting seeing how the market has mechanisms for functioning even when things aren't going well. Feel like we hope stocks will just constantly rise in value which is an unrealistic expectation in a long run.
@JakeBroe
@JakeBroe 4 жыл бұрын
I kind of want to know who figured this out. I feel like back in the 1700s there were people during the Tulip Stock bubble who were like, "Let me borrow your stupid stock for a premium and I'll give it back to you after it crashes you idiot." And someone was like, "Okay..."
@parloharracksingh733
@parloharracksingh733 3 жыл бұрын
i just discovered this video today. Thank you Jake for explaining it this was super helpful. Even though I have a margin account I purchase a stock that took a nose dive and I was wondering how to short sell it to make up for some of the loss. I did not sell it however in the future I will apply this knowledge.
@jonnyboyGO
@jonnyboyGO 7 ай бұрын
Such a clear & concise explanation of the subject. Thank you for making it so easy to understand. 🙌🏽🙏🏽💎
@AdamGForPolitiCorps
@AdamGForPolitiCorps 4 жыл бұрын
You have a great way of explaining complicated topics, simply.
@JakeBroe
@JakeBroe 4 жыл бұрын
Thanks Adam! All those years of teaching might have been good practice for making KZfaq tutorials. We'll see how far I can take this!
@walterclark3274
@walterclark3274 4 жыл бұрын
Nice job brother! I like your simplicity and clarity. This is a good topic to dig into. Many people want to learn more about this and how to do it. Can you do this on Robinhood as well?
@JakeBroe
@JakeBroe 4 жыл бұрын
Thanks Walter! You actually can not short sell on Robinhood and the reason for this is because Robinhood does not own or manage any large ETFs or Mutual Funds. They don't have the volume of company stock in a ready to borrow inventory for people to short sell like the big banks do.
@walterclark3274
@walterclark3274 4 жыл бұрын
@@JakeBroe Thank you! That makes a lot of sense
@bc-guy852
@bc-guy852 2 жыл бұрын
Jake, you might have missed a potential calling. I've had many university lectures in various subjects and your presentation skills rank up there with the most engaging Prof's I've listened to. I've forwarded many of your episodes to my brother - a PhD in English who works and teaches at a Canadian University for 25+ years. I've been a subscriber for a while and just going through some of your catalog; very impressive in all regards Jake. Props to you. PS I love your recent thumbnails for your latest pootin-bashing-classics. Please keep it up! Slava Ukraini - Heroyam Slava! PPS you say it in English in many episodes - cool. Try it in Ukrainian!! YOU can do it. (just try saying it.. 'Slava OU-kryeeNi'. (Two i's in there.) Heroyam Slava - just the way it sounds. I love your stuff J. J - in BC-Canada.
@harshshah4465
@harshshah4465 3 жыл бұрын
Genuinely your videos explain things so well thank you
@JakeBroe
@JakeBroe 3 жыл бұрын
Thanks Harsh! Cheers!
@traumflug
@traumflug Жыл бұрын
These risks are the reason why one probably better trades with derivates like Options or KnockOuts. These are available for short (Put) and long (Call) trading, but always limit the risk to 100% loss. 100% loss sounds terrible, but done right, it's less than a 10% loss on the original stock.
@MiguelMartinez-in1en
@MiguelMartinez-in1en 2 жыл бұрын
Great video! You are the only person that explained short selling perfect! Thank you for that!
@JakeBroe
@JakeBroe 2 жыл бұрын
Thanks Miguel! I appreciate the comment! Cheers!
@mahendranmoorthy6079
@mahendranmoorthy6079 8 ай бұрын
Very good explanation, Thanks Jake!!!!
@kmque3166
@kmque3166 3 жыл бұрын
I like the charts u make to make presentations more understandable.
@JakeBroe
@JakeBroe 3 жыл бұрын
Thanks so much K Mque! I am for sure a visual learner, so I always try and include my math when I talk about topics!
@larsrons7937
@larsrons7937 2 жыл бұрын
*Short selling,* I did (still do) this all the time in the 1998 game *"Railroad Tycoon II"* and it works like magic - usually. Occasionally I couldn't avoid getting short sqeezed by some computer player. Now this game is NOT like real life, I have a good birds eye view of how things are going for the different companies in the game, the computer players don't have that (at least to the same extent). But it did teach me some basics of "short selling." *Jake, thanks for brilliant videos on the economic aspects of the war in Ukraine.*
@KevinJohnsonX
@KevinJohnsonX 4 жыл бұрын
Crystal clear explanation. Great job 👏
@JakeBroe
@JakeBroe 4 жыл бұрын
Thanks so much Kevin! I appreciate that! My video today will be a live example on Schwab's platform.
@KevinJohnsonX
@KevinJohnsonX 4 жыл бұрын
@@JakeBroe 🍿 I'm ready for it.
@Bangpaulxu
@Bangpaulxu 3 жыл бұрын
Very good explanation, thank you Jake.
@JakeBroe
@JakeBroe 3 жыл бұрын
You are very welcome Bangpaulxu! Cheers!
@Fanotesemara
@Fanotesemara 9 ай бұрын
You are one of the best.
@YenchieLee
@YenchieLee 5 ай бұрын
very nice explanation
@mattjensen1020
@mattjensen1020 4 жыл бұрын
Great explanation!
@JakeBroe
@JakeBroe 4 жыл бұрын
Thanks Matt! Cheers!
@co88liwan31
@co88liwan31 3 жыл бұрын
Greate talks! Thank you!
@JakeBroe
@JakeBroe 3 жыл бұрын
Thanks chengdol! Cheers!
@simonyingliu1396
@simonyingliu1396 4 жыл бұрын
Great explanation Jake. I would like to keep an eye on Snowflake since their IPO yesterday. :)
@JakeBroe
@JakeBroe 4 жыл бұрын
Hey Simon! Looks like Snowflake is already down 10% from its initial IPO as people are shorting it assuming it is over valued. Pretty interesting to watch! Not for me though, lol
@tomhenry4993
@tomhenry4993 Жыл бұрын
excellent!
@peterbland7227
@peterbland7227 4 ай бұрын
It seems short selling is akin to either gambling or worse, encouraging trading with inside information. Why is this legal?
@brewstaj
@brewstaj 4 жыл бұрын
Well done as always. :)
@JakeBroe
@JakeBroe 4 жыл бұрын
Thanks Brewster!
@Spinattitude
@Spinattitude 4 жыл бұрын
I'm your basic retail investor (read: generally dumb). I use Schwab Brokerage and put in an order yesterday for 4 shares of SNOW at the IPO price of $120 yesterday. My order wasn't filled, and the stock, predictably, jumped way over $120 today. Would you do a video explaining why my order for the IPO price didn't fill before the shares jumped up?
@JakeBroe
@JakeBroe 4 жыл бұрын
Hey Spinattitude! Yeah, I should do a video on this. The share price of SNOW doubled in 1 day, and this is actually very bad for the company because it means they lost out on about 4 billion in funds for their company. Institutional (preferred) investors get first dibs on IPOs, this is contingent on your relationship with your bank if you can buy an IPO since each bank is only given a limited number of shares to buy.
@Spinattitude
@Spinattitude 4 жыл бұрын
@@JakeBroe so institutional investors get to buy at the IPO price prior to the general public? This is why I'm confused. If it's an initial public offering, aren't us retail investors the "public?"
@JakeBroe
@JakeBroe 4 жыл бұрын
@@Spinattitude , no, us retail investors are not the "public". The initial shares created from an IPO are divided up amongst the biggest investment banks in the country and then those banks offer them to their largest clients (for a fee). The only think "public" about an IPO is that once it is listed on the New York Stock exchange, anyone can re-sell or buy more of re-sold stock from the people who initially were offered IPO stock. If you want access to IPO stock through your broker... then hold hundreds of thousands of dollars with them. Sucks, but that's the system.
@Spinattitude
@Spinattitude 4 жыл бұрын
@@JakeBroe wow, that's a look behind the curtain. Guess AC/DC had it right...money talks! Thanks for clarifying that.
@Aquilesb
@Aquilesb 4 жыл бұрын
I'd love if you can go over more of these topics, options wink wink
@JakeBroe
@JakeBroe 4 жыл бұрын
Yep! I actually already filmed a video on trading options, but there is just too much information for one video unfortunately. I think I need to re-film it. So as of right now I am planning a 6 part video series on trading options because it is just so complex (and risky!). But I am going to do live examples in my Schwab account. Look for those in the next 2 weeks!
@Aquilesb
@Aquilesb 4 жыл бұрын
@@JakeBroe Thanks! I'll look up for the video you've made already talking about it
@JakeBroe
@JakeBroe 4 жыл бұрын
@@Aquilesb , oh no! I filmed it, but have it pending to upload. It hasn't gone live yet, sorry about that confusion. Coming soon!
@Aquilesb
@Aquilesb 4 жыл бұрын
@@JakeBroe oh ok, looking forward for it then 👍🏼
@polarbearoughey
@polarbearoughey 3 жыл бұрын
Tell me if I'm stupid but it appears that once you get approved for margin you can short sell something like AMZN, then immediately cover the sale and voila, you have shares of AMZN and you didn't need the amount of the share price to acquire it. Edit: Now, I see you never acquire shares of the underlying in this scenario, got it.
@JakeBroe
@JakeBroe 3 жыл бұрын
Cheers! Glad you got it figured out!
@crismtz2818
@crismtz2818 3 жыл бұрын
When you short sell like you said you don't get taxed??
@dapetik
@dapetik 8 ай бұрын
So can i short stocks i already own. Or do i have to sell it first?
@DailySwingz
@DailySwingz 7 ай бұрын
You need to sell it first and then buy it
@angusabbott5615
@angusabbott5615 Жыл бұрын
I have been watching your Ukrainian conflict videos but wanted to understand "shorting" of Bitcoin
@jeffnoisette
@jeffnoisette 4 жыл бұрын
We can't do stop trail on schwab mobile, right?
@JakeBroe
@JakeBroe 4 жыл бұрын
I do not believe so. But I am sure within a year Schwab will add this feature. They are trying to compete with Robinhood and want to match their functionality.
@jeffnoisette
@jeffnoisette 4 жыл бұрын
@@JakeBroe I hope so! Thanks👍🏾
@ks-fz9fq
@ks-fz9fq 2 жыл бұрын
I did not know that that the losses are unlimited in a short sale .
@BlackJesus8463
@BlackJesus8463 4 жыл бұрын
What does the "buy to cover" button got that the "buy" button doesn't got? lolz
@JakeBroe
@JakeBroe 4 жыл бұрын
Haha, solid argument!
@kevinsheeler6
@kevinsheeler6 3 жыл бұрын
good stuff
@JakeBroe
@JakeBroe 3 жыл бұрын
Thanks Kevin! Cheers!
@ThinkMoneyBenny
@ThinkMoneyBenny 4 жыл бұрын
Whoever tried this with Tesla lost a lot of money 🐻
@JakeBroe
@JakeBroe 4 жыл бұрын
Yep, world of hurt with a company that is up 800% in a year!
@theBROKEbroker
@theBROKEbroker 3 жыл бұрын
What ever happend it’s u buying TVIX or a similar one 🤐 I would never go all in on shorting the market that way but I have recently hedged lik 500$ of a 50k account and it was actually plenty for the last crash I just so happen to have a bear pie in M1 that I lost lik 70 percent on but then it went up lik 800 percent in the March crash with inverse oil sqqq gold TVIX all that stuff and it went from lik a few hundred to a few thousand so that was cool sadly they don’t hav TVIX anymore haha they have lik TVIXF or something but I bought a different one wish u look hope u didn’t lose to much
@JakeBroe
@JakeBroe 3 жыл бұрын
Hey TBB! TVIX was actually discontinued. Leveraged velocity ETFs are very expensive and difficult to maintain. Starting next year I am going to start a series where I will go over all my swing trades. Check back for that later!
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