From Gosling to GameStop, ‘shorting’ is having a moment. But what exactly is it?

With local and global sharemarkets under serious pressure amid fears of a recession, many retail investors are considering adopting short-selling for the first time.Matt Leibowitz, chief executive of low-cost share trading platform Stake says he has seen a significant increase in people looking to short over the past year, as the value of high profile tech stocks starting falling.

The risk for you, as the short-seller, is that you’re wrong about an asset being over-rated. If you get it wrong, your losses are theoretically limitless. Why? Because if you’ve promised to give your friend back their Company X share in a week, sold it and during that week the value of Company X shares skyrocket, you still have to keep your promise.

Short-sellers such as Burry foresaw the collapse and made money by betting against something that too many investors had too much confidence in.Credit:In Australia, it’s legal to engage in shorting of shares as long you have an agreement in place that guarantees you’ll have the assets you’re intending to sell –the right to give your buyer title over the product – when you go to sell them. That’s called “covered short selling”.

If they all rush to try and buy the asset at the same time, the value of it goes through the roof. And the longer you wait, the worse your losses might get. Many brokers do allow retail traders to take out derivative contracts that give them exposure to short positions. These include contracts for difference, or CFDs, which allow users to speculate on the price of shares, commodities and currencies without ever owning the underlying asset. ASIC has repeatedly warned about CFDs and last year capped the amount of leverage retail investors can use in them.

If, however, the price of fuel decreases to $1 a litre as you’ve predicted, the shipping company loses out because they now have to buy the fuel from you, even though it’s more expensive than it would have been without the contract. But good news forBut hang on, would you want to be making these deals?

Australia Latest News, Australia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

I’m rejecting the style conventions that new mothers normally followICYMI: Am I allowed to dress sexy and wear low cut necklines now that I have transformed into A Mother? | OPINION by CE_Zielinski CE_Zielinski Wear what you want. As long as you cover your nipples (unless breastfeeding), anus & labia, you’re legal. Don’t let others decide what you wear. ‘Allowed to wear’ … what kind of society hopes to tell women what they’re allowed to wear? Very poor timing, t’age CE_Zielinski yes, it’s fine. CE_Zielinski Are we certain this isn’t news.
Source: theage - 🏆 8. / 77 Read more »

Showing my daughter Pakistan, the country of my birth, reminded me I am part of something bigger | Saman ShadI’ve shown my child how important it is to know herself and to not forget there will always be a world that welcomes her with open arms
Source: GuardianAus - 🏆 1. / 98 Read more »

'Special moment' as home crowd thanks Aussie cricketersAustralia took a consolation win in the fifth one-day international against Sri Lanka, but the victory had a surprising effect on the home crowd. It’s time for Finch to move seriously. Enough is enough!! What do U think of the reports that 7 want tennis and U guys get the Cricket back? I'm hoping they're true because Fox has the worst coverage I have seen. I know if Stan Sport also ends up with the Cricket, it'll be the great coverage that u guys used to have. Thank you Sir Lanka
Source: wwos - 🏆 12. / 68 Read more »

Toy fair a monster day out for super collector and his daughterCollecting has been a lifelong passion for Beven Davey, 41, who now owns “thousands” of action figures – “I haven’t counted them” – and shares them with his seven-year-old daughter, Izzy
Source: theage - 🏆 8. / 77 Read more »

Monkeypox not yet a health emergency: WHOMonkeypox is not yet a global health emergency, the WHO has ruled, although director-general Tedros Adhanom Ghebreyesus says he is deeply concerned about the outbreak. 7NEWS WHO We don’t care jog on
Source: 7NewsMelbourne - 🏆 18. / 59 Read more »

Hope, joy, anguish and despair crammed into final 75 seconds of Super Netball thriller | Megan MauriceA short but pivotal period of time that saw the Vixens edge the Giants 55-54 to reach the grand final epitomised the 2022 season
Source: GuardianAus - 🏆 1. / 98 Read more »