Comments on: “Day Traders Selling Short will be Shot on Sight,” says the SEC http://www.mydaytradingtutor.com/news/2008/09/19/day-traders-selling-short-will-be-shot-on-sight-says-the-sec/ Learn how to benefit from forex and stock day trading Tue, 07 Sep 2010 07:23:22 +0000 http://wordpress.org/?v=2.6.5 By: Dan Alvarez http://www.mydaytradingtutor.com/news/2008/09/19/day-traders-selling-short-will-be-shot-on-sight-says-the-sec/#comment-7999 Dan Alvarez Mon, 22 Sep 2008 06:31:08 +0000 http://www.mydaytradingtutor.com/news/?p=254#comment-7999 The short seller borrows the shares from their broker, who usually in turn has borrowed the shares from some other investor who is holding his shares long. When a trader opens a margin stock brokerage account, signing the margin agreement allows the brokerage firm to lend the trader’s shares to short sellers. The short seller does not pay fees to the owner of the shares. He pays a commission the brokerage firm when the short was opened and margin interest for any margin balance (the higher the shares go against him, the more margin interest he pays). The short seller borrows the shares from their broker, who usually in turn has borrowed the shares from some other investor who is holding his shares long. When a trader opens a margin stock brokerage account, signing the margin agreement allows the brokerage firm to lend the trader’s shares to short sellers.

The short seller does not pay fees to the owner of the shares. He pays a commission the brokerage firm when the short was opened and margin interest for any margin balance (the higher the shares go against him, the more margin interest he pays).

]]> By: efletch http://www.mydaytradingtutor.com/news/2008/09/19/day-traders-selling-short-will-be-shot-on-sight-says-the-sec/#comment-7985 efletch Sat, 20 Sep 2008 05:11:58 +0000 http://www.mydaytradingtutor.com/news/?p=254#comment-7985 Sir: I am not clear on one thing. From whom are the shares of stock "borrowed" on the front end of a short? Does the shorting trader pay interest or fees to the owner? Sir: I am not clear on one thing. From whom are the shares of stock “borrowed” on the front end of a short? Does the shorting trader pay interest or fees to the owner?

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