U. L. L. discussed on Bull 'N Bears

Automatic TRANSCRIPT

U. L. L. lasted two one zero two one zero that ship you know what there's so much to talk about when it comes to the financial markets earlier in the show we're talking about the you know the movement in the market the market always goes up in the market always goes down it's inevitable to do it for over two hundred years let's take a moment let's talk about how does somebody capitalized as the market falls when a stock falls but something falls in price how can someone make money it's called shorting your the best in the world to explain well shorting was short selling is simply a way of making money when the market falls and it's a great movie called the big short if you ever want to go rented or Netflix it talks about how people made money in the collapse of the real estate market because they were betting against the mortgage industry think about that and that's never been done it's a great movie but it shows you what shorting is it shows you that just because price falls that's not a bad day in his the problem for many the listeners you can convince your whole life when the market was now that's a bad day we think about you watching the NBC news some night the Dow is down four hundred points Lester Holt comes on says good evening it was a tough day on Wall Street today you'll hear that it's not a tough days just money went from one person's account into another one entity into another this is simply a transaction and somebody who understood how to make money when the market fell took the money from people that didn't and so if you don't learn the skills of making money when the market falls your gonna make money when it goes up and historically it goes up about half the time I'm done about half the time this this call valuation seems get overvalued to get price too high and they traditionally will fall to their fair value and then when they get undervalued another was the price really on sale so to speak they'll eventually have enough demand they'll bring them back up to fair value so valuations overvalued undervalued fair value or market terms we want to sell something it's overvalued and here's the thing we can enter a trade when something's over value that's what shorting is it means selling something we don't own and that's what people get confused a state champ how can we sell a stock if we don't own it well your broker loans you the shares that's what shorting is your brokers allow you to use their inventory to sell into the financial markets in advance of a price moves down to your expectation of a moved out because you believe it's going to fall me give an example you could done that this past week with a stock call Tiffany health its trade on the nasdaq ticker symbol T. V. T. Y. that stock on the twelfth of the month of February twelfth was trading around twenty four dollars a share eight days later with a twelve Bucks this year it fell fifty percent in eight days now here's what you could have done you could have gone into the market back on the twelfth and sold the stock at twenty four shorted it in other words your broker loans you the stock to sell into the financial market so you don't own it already you might have never owned that stock but you're selling if you're selling it to enter a position in the markets and people get confused with that how do I sell if I don't own it your broker loans to to you they allow you to use the shares here's why because they're gonna charge you a commission when you execute the trade the entrance actually biased you believe it's going to fall you want to profit from that moved out so they allow you to use their shares so you sell it at twenty four Bucks a share back on the twelfth of the month on the twenty the monkey bite back at twelve Bucks this year so what did you do you sold at twenty four he bought a twelve C. the key in the market is the buy low and sell high you just did that just in reverse order now the moment you sold a twenty foot also stock goes out into the market sold to somebody we don't care who somebody bought it would fall to twelve you buy it back the moment you buy it back your shares that you used to go right back in your broker's inventory but they let you keep the difference in this case twelve dollars a share on a hundred shares you do the math it's a profit on a move down the stock and you never owned it that's what shorting is it's available and every single person listen to us could learn how to short sell and take advantage of market direction up or down because up is good in Dallas good and a lot of people don't realize that you have a lot of people think up is good down is bad and that's the problem the financial markets goes both directions once you realize you can capitalize in both directions now you don't have to worry about direction the market there are people out there that actually sleep a lot easier if they didn't have to be concerned about a fall in the.

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