mishra Posted January 28, 2021 Posted January 28, 2021 ^ why is it illegal but not independe financial activity. Pointers such as these are used everyday by traders. If anything, short selling is biggest culprit
Clarke Posted January 28, 2021 Posted January 28, 2021 Originally from https://pbs.twimg.com/media/EszA5sEXIAA6d9J?format=jpg&name=large BacktoCricaddict 1
BacktoCricaddict Posted January 28, 2021 Posted January 28, 2021 This is 5 hours ago, Clarke said: Originally from https://pbs.twimg.com/media/EszA5sEXIAA6d9J?format=jpg&name=large At the risk of being laughed at for my ignorance, I ask: If I let you borrow shares, then you do this short thing and return my shares when the price has dropped, why would I buy them back from you? What's in it for me?
mishra Posted January 28, 2021 Posted January 28, 2021 (edited) 12 minutes ago, BacktoCricaddict said: This is At the risk of being laughed at for my ignorance, I ask: If I let you borrow shares, then you do this short thing and return my shares when the price has dropped, why would I buy them back from you? What's in it for me? so , simple terms. says today 1 share of company XYZ was $2 dollar each. if borrowed 10 shares that meant i borrowed 10X$2=$20 dollars. I sold it immediately for $20. Next day share prices wen low say $1 a share. I bought it 10X$1 and returned 10 shares to you. So I made $10 profit (offcouse I will have to pay some interest on borrowed amount and period). ( Generally borrowing is for specified limit with clause that I return the share). Now who will lend the share. It can be any one who is holding share of a actual buyer. Say Sharekhan or HSBC Bank has your shares kept in its depository. It will lend it. Simple money banking type but instead shares are taken on credit. Infact even borrowers dont even buy or sell the actual shares. Borrowers go in a contract with depository. Edited January 28, 2021 by mishra BacktoCricaddict 1
BacktoCricaddict Posted January 28, 2021 Posted January 28, 2021 Just now, mishra said: so , simple terms. says today 1 share of company XYZ was $2 dollar each. if borrowed 10 shares that meant i borrowed 10X$2=$20 dollars. I sold it immediately for $20. Next day share prices wen low say $1 a share. I bought it 10X$1 and returned 10 shares to you. So I made $10 profit (offcouse I will have to pay some interest on borrowed amount and period). ( Generally borrowing is for specified limit with clause that I return the share). First part, I get. That is easy. Quote Now who will lend the share. It can be any one who is holding share from actual buyer. Say sharekhan has you shares kept in depository. It will lend it. Simple money banking type but instead shares are taken on credit This part, I am having trouble. When you return shares to sharekhan, do you pay him interest? Or a cut from your $10 profit?
mishra Posted January 28, 2021 Posted January 28, 2021 (edited) 14 minutes ago, BacktoCricaddict said: This part, I am having trouble. When you return shares to sharekhan, do you pay him interest? Or a cut from your $10 profit? Cool. so second part Now who will lend the share to me. It can be any one who is holding share of a actual buyer. Say Sharekhan or HSBC Bank has your shares kept in its depository. When you open a account, they will ask if they are allowed to lend it and in return, they will pay you certain amount say xyz interest per annum. Simple money banking type but instead shares are taken on credit/loan. Infact even I as borrowers dont even buy or sell the actual shares. Borrowers just go in a contract with depository as to when they will return the shares while share can actually stay at the depository only along with say 0.2 percent interest of value of share on day I borrowed. So in above example, I returned 10 shares to depository along wit 2 cents as interest. After duty and other stuff, I might have $9 profit. some short sell just during few hours . So like just before and after some announcement is made that may impact stock valu (example earning, government policy, interest rate) This is why people call it betting Edited January 28, 2021 by mishra Turning_track and BacktoCricaddict 2
BacktoCricaddict Posted January 28, 2021 Posted January 28, 2021 9 minutes ago, mishra said: Cool. so second part Now who will lend the share to me. It can be any one who is holding share of a actual buyer. Say Sharekhan or HSBC Bank has your shares kept in its depository. When you open a account, they will ask if they are allowed to lend it and in return, they will pay you certain amount say xyz interest per annum. Simple money banking type but instead shares are taken on credit/loan. Infact even I as borrowers dont even buy or sell the actual shares. Borrowers just go in a contract with depository as to when they will return the shares while share can actually stay at the depository only along with say 0.2 percent interest of value of share on day I borrowed. So in above example, I returned 10 shares to depository along wit 2 cents as interest. After duty and other stuff, I might have $9 profit. some short sell just during few hours . So like just before and after some announcement is made that may impact stock valu (example earning, government policy, interest rate) This is why people call it betting Nice explanation. Thanks!! One last question. What does sharekhan or HSBC gain from this transaction?
mishra Posted January 28, 2021 Posted January 28, 2021 2 minutes ago, BacktoCricaddict said: Nice explanation. Thanks!! One last question. What does sharekhan or HSBC gain from this transaction? They will lend me your share , but they will charge a small interest on value of lent share which i pay. They may pass some of interest to you too. BacktoCricaddict 1
maniac Posted January 28, 2021 Posted January 28, 2021 There is something shady happening on the stock market. how the F is blockbuster 700% up? For Indian residents who haven’t heard of the company, basically blockbuster was your video cassette/ DVD rental store. How is there even the slightest possibility of any surge there? something suspicious happening and it’s a worry for basic small time non risk taking investors who depend on their govt bonds purchases in IRA and 401k it’s scary. https://www.bloomberg.com/news/articles/2021-01-27/bankrupt-blockbuster-remnant-joins-reddit-inspired-retail-rally
zubinpepsi Posted January 28, 2021 Posted January 28, 2021 GME went down all the way to 112 and now back at 275.. I bought AAL this morning..
maniac Posted January 28, 2021 Posted January 28, 2021 9 minutes ago, zubinpepsi said: GME went down all the way to 112 and now back at 275.. I bought AAL this morning.. I was planning on jumping on the GME bandwagon yesterday but didn’t, thankful for that I think TD Ameritrade blocked GME trading buy and sell
zubinpepsi Posted January 28, 2021 Posted January 28, 2021 its too much of noise on GME..im not comfortable putting my money on it.. lotsa people do.. more power to them.. i agree with their war.. and i support them.. the biggest frauds are the hedge fund guys..
coffee_rules Posted January 28, 2021 Posted January 28, 2021 1 hour ago, zubinpepsi said: its too much of noise on GME..im not comfortable putting my money on it.. lotsa people do.. more power to them.. i agree with their war.. and i support them.. the biggest frauds are the hedge fund guys.. As if the Hedge fund mafia doesn't share information and hedge their bets on trending information. But if SM does it, it's all a big conspiracy! SEC is all up and arms. I agree with @Jimmy Cliff on a corporate lobby or monopoly on wall street stock trading
mishra Posted January 28, 2021 Posted January 28, 2021 2 hours ago, maniac said: There is something shady happening on the stock market. how the F is blockbuster 700% up? For Indian residents who haven’t heard of the company, basically blockbuster was your video cassette/ DVD rental store. How is there even the slightest possibility of any surge there? something suspicious happening and it’s a worry for basic small time non risk taking investors who depend on their govt bonds purchases in IRA and 401k it’s scary. https://www.bloomberg.com/news/articles/2021-01-27/bankrupt-blockbuster-remnant-joins-reddit-inspired-retail-rally And blackberry too. Who buys blackberry nowadays. It might be that those companies are getting revived under Biden presidency or simply a big payout to exec before shutting down the shop.
Laaloo Posted January 28, 2021 Posted January 28, 2021 30 minutes ago, mishra said: And blackberry too. Who buys blackberry nowadays. It might be that those companies are getting revived under Biden presidency or simply a big payout to exec before shutting down the shop. Blackberry was pretty good. I loved their OS. Smooth and crashed less than android. I still have their shares so I’m not complaining. mishra 1
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