HSX Forum

Playing & Trading Strategy

I think that is how it's "virtually" done on HSx, IPO stocks remaining don't count shorted shares -good (IMO) explanation inside-

Posted by: arf on May 03, 10:44 in response to Dave3626's post That would make sense, since you're technically...

Where the term "short selling" came from is the stock market, for those who don't know.

An investor with tons of cash and stocks, and is certain a stock is going to go down, but wants to make more of a profit will borrow shares of stocks from others at a percentage of guaranteed interest + same stock payback.  This method was perfected in the 1920's, and was a non-significant part of Black Friday.

Investor then sells all stocks, his and the borrowed ones (which, by definition are held long), causing the value of the stock to decrease.   When the stock has decreased enough in value, the investor re-buys the stock at the new, lower price, having $dropped * shares in "Extra Money", which is more than enough to give back the borrowed stocks plus iinterest, as well as hold more shares than he did before, with money left over.

HSX does something similar, but acts as the "borrower" of those stocks, so when a stock is shorted, you borrowed a stock from the infinite HSX bank of stocks, and sold it, hoping to rebuy it at a profit when the price of the stock goes down.  If the price of the stock goes up, the value is -$xxx,xxx, which means you still need to pay for the stock you "borrowed" at a lower price, but at the current market price, even though it is through the virtual HSX entity.

 

Thus, a large number of people holding the stock and selling, or a large number of people buying the stock will have a greater impact, as it is "Real Money" moving into/out of the stock.  When you short a stock, you are using HSX's money, with the promise to "make good" on it later, therefore, it doesn't change the price nearly as much, since HSX has infinite shares.





Post a Reply

To post to the forums you must first login!


Kevin Costner (KCOST) 1999 54.65 (0.00)          Kevin Costner (KCOST) 1999 54.65 (0.00)          Hold On to Your Angels (HOTYA) 150000 9.48 (+0.15)          Hold On to Your Angels (HOTYA) 150000 9.48 (+0.15)          Photograph 51 (PHO51) 150000 7.85 (+0.15)          Ramayana (RAMAY) 149999 19.12 (-0.36)          Photograph 51 (PHO51) 150000 7.85 (+0.15)          Drag (DRAG) 150000 5.68 (+0.41)          The Beatles - A Four-Film Cinema (BEAT1) 14000 110.79 (0.00)          Drag (DRAG) 30000 5.68 (+0.41)          Father Joe (FTJOE) 150000 7.09 (+0.26)          Constantine (CNST2) 150000 33.33 (-0.42)          Father Joe (FTJOE) 150000 7.09 (+0.26)          They Know (TKNOW) 20000 15.39 (-0.50)          They Know (TKNOW) 40000 15.39 (-0.50)          Doctor Caligari’s Cabinet of W (DCCOW) 14999 17.94 (+0.35)          King (KING) 150000 3.53 (+0.30)          Ramayana (RAMAY) 150000 19.12 (-0.36)          King (KING) 150000 3.53 (+0.30)          The Further Mis-Adventures of Cl (TAOCB) 150000 14.44 (-0.12)          Ramayana (RAMAY) 150000 19.12 (-0.36)          They Know (TKNOW) 150000 15.39 (-0.50)          King (KING) 150000 3.53 (+0.30)          They Know (TKNOW) 150000 15.39 (-0.50)          Tyrant (TYRNT) 50000 21.55 (-0.06)          Constantine (CNST2) 10000 33.33 (-0.42)          Father Joe (FTJOE) 150000 7.09 (+0.26)          King (KING) 150000 3.53 (+0.30)          Tyrant (TYRNT) 50000 21.55 (-0.06)          Father Joe (FTJOE) 150000 7.09 (+0.26)          Constantine (CNST2) 5000 33.33 (-0.42)          Tyrant (TYRNT) 50000 21.55 (-0.06)          Father Joe (FTJOE) 10000 7.09 (+0.26)          Dragon (DRAGO) 50000 5.78 (+0.11)          Drag (DRAG) 149999 5.68 (+0.41)          Dragon (DRAGO) 50000 5.78 (+0.11)          Dragon (DRAGO) 50000 5.78 (+0.11)          A Head Full of Ghosts (AHFOG) 150000 4.34 (+0.42)          A Head Full of Ghosts (AHFOG) 149999 4.34 (+0.42)          Doctor Caligari’s Cabinet of W (DCCOW) 150000 17.94 (+0.35)          A Head Full of Ghosts (AHFOG) 10000 4.34 (+0.42)          Doctor Caligari’s Cabinet of W (DCCOW) 150000 17.94 (+0.35)          Drag (DRAG) 150000 5.68 (+0.41)          Drag (DRAG) 150000 5.68 (+0.41)          Not Alone (NTALN) 19500 130.41 (+0.04)          The Hunger Games: Sunrise on the (HGAM6) 10000 208.10 (-1.03)          Drag (DRAG) 150000 5.68 (+0.41)          The Brand aka Branded (BRAND) 60000 3.45 (-0.16)          Ramayana (RAMAY) 150000 19.12 (-0.36)          A Head Full of Ghosts (AHFOG) 150000 4.34 (+0.42)