Comment on Open thread, Aug. 10 - Aug. 16, 2015

Fri, 14 Aug 2015 17:15:29 GMT

Another thing to watch out for when shorting stocks is dividends. If you are short a stock on the ex dividend date, then you have to pay the dividend on each share that you have shorted. However, as long as you keep margin calls and dividends in mind, short selling is a good technique (and an easy one) to play a stock that you are bearish on.

And, no, you don't need any special connections, although you typically need to request short-selling privileges on your brokerage account.

Another way to play a stock you are bearish on is buying put options. But put options are a lot harder to use effectively because (among other reasons) they become worthless on the expiration date.

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