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How to short-sell U.S. stocks

How to short-sell U.S. stocks:

1. Short-sell stocks directly

To short-sell stocks directly through brokers, such as Apple’s stock AAPL, first borrow money from the broker-dealer Sell ??the stocks that came over, buy them back when Apple's stock falls back, and return them to the brokerage to earn the price difference.

2. Go short by buying and selling options corresponding to stocks

Many companies in the U.S. stock market have corresponding options for their stocks, with options expiring in one month, two months, and There are also differences in price for options that expire in one year, etc. There are also long and short options. If you have U.S. stocks in your hands, you can sell options to others (similar to "issuing" options yourself). This operation is called "writing." You can directly buy short options (buy PUT), which requires less capital investment; or you can also "write" long options to others after buying stocks. No matter whether the stock rises or falls, as long as you put the underlying If you "write" a long option above the current price, you will make money nine times out of ten.

3. Buy options corresponding to the index

The S&P 500 Index, Nasdaq Index, Dow Jones Industrial Index, etc. in the U.S. stock market also have options, including index options and stock options. The trading methods are similar, but individuals cannot perform "write" operations. If they want to go short, they can only purchase short options (PUT).

4. U.S. stock short-selling ETFs

There are many short-selling ETFs in the U.S. stock market, such as shorting DXD of the Dow Jones Index, shorting QID of the Nasdaq Index, and shorting the financial services industry. Index SKF, etc. If you are unwilling to take too much risk, you may wish to consider buying short-selling ETFs. They are basically operated by experts and the returns are relatively considerable.

5. Through futures trading

Futures trading and the stock market are conducted separately. Investors can also short U.S. stocks through stock index futures, but stock index futures have many fewer tricks than options. There are also relatively few investors who short U.S. stocks through stock index futures.

What is short selling in US stocks?

When it comes to short-selling U.S. stocks, we have to mention its opposite - long-selling U.S. stocks. Simply put, long and short are two opposite operating modes in the stock market or futures market. Long refers to buying to open a position when the market is bullish, and then selling to close the position; short selling refers to selling to open a position when the market is bearish, and then buying to close the position. Both make profits by earning the price difference before and after.

To be specific, shorting U.S. stocks means borrowing stocks from a brokerage firm to sell them in anticipation of a certain U.S. stock falling, and then buying the stock when it falls to repay the brokerage, earning the difference in price. It's the profit earned. In this process, you need to pay the brokerage the interest generated by "borrowing stocks", which is the interest on securities lending. When there are more short-selling investors on a certain stock, its securities lending rate will be more expensive.