firstenergy....

[daved150]

...or anybody else withb the answer..
what happens if you set out to shoft sell a stock and the company bankrupts? gm's at $1.92 a share, but in 2 weeks, it'll be 0! can i short sell a few hundred thousand shares and make it right when the stock hits $0.00 a share? (i'm thinking no, but that'd be great!!)

[firstenrgy]

Re: firstenergy....

Yes. That's the point of short selling. Your selling shares you don't own (borrowing them) in hopes of replacing them later at a lesser price.
So if you were on your etrade/ameritrade... acct you would choose the "sell short" option and it will sell the stock at current price. When you are buying it back or "covering" you would choose the "buy to cover" option.
One note on selling short... keep in mind that if a stock is paying a dividend and you short sell the stock, you are responsible for that dividend. It's usually a very small amount of your trade but will sometimes get you to cover before the dividend date.

[daved150]

Re: firstenergy....

Yes. That's the point of short selling. Your selling shares you don't own (borrowing them) in hopes of replacing them later at a lesser price.
So if you were on your etrade/ameritrade... acct you would choose the "sell short" option and it will sell the stock at current price. When you are buying it back or "covering" you would choose the "buy to cover" option.
One note on selling short... keep in mind that if a stock is paying a dividend and you short sell the stock, you are responsible for that dividend. It's usually a very small amount of your trade but will sometimes get you to cover before the dividend date.

ok...so you could literaly wait until june 2nd when the stocks at zero and "cover"? dude...it's like stealing!! why dont you short sell a few million shares...you can just send me 15% for a consulant fee. i gotta be missing something...where's the risk in that transaction?
(ler me know when you need my addy for the cashiers check)

oh..and explain the last sentance please

[firstenrgy]

Re: firstenergy....

The stock is at that price for a reason. We have an administration that wants to have their hand in everthing and bankrupcty will take that away. I agree GM is worth $-32 a share (book value), include pension obligations it is close to $-90 a share. How could you lose right? Be careful!
With the stock at $1.43 the ride down has been had. Can you still make money? Yes but the risk/reward is much higher.