ok so today i used paper trading and shorted the stock eyes i got out before it turned on me, and made some small profit of 240 dollars.
So i guess what i want with this blogpost is to get some information about short selling.
I always use limit orders when i buy and sell. This time i used a limit order to short the stock and i entered a price that is above the current price wich was like 5.57 i think and the current price was 5.56, and my question is why do i have to put in a higher sell price when shorting? or selling, why do you need to put a higher price than the current price.
I understand that with limit orders
when it comes to buy
you can put a limit price at 10 and the stock will be bought at 10 or lower
and when it comes to sell
you can put a limit order at 9 or higher.
i would appreciate if somebody could explain this for me, thanks.
It's the same principle. When you're shorting a stock, you want the highest price possible that you can get. The limit, then, is the minimum price that you would sell it for or higher.
so if a stock is trading at 10 and i want to short it i should aim to get a higher "limit order- sell" ? for an example in this case 12? i think i dont get what you mean and would appreciate it if you could describe a scenario where you explanation could make more sense to me
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