Which stocks can you sell short?

The actual stocks that you can sell short are typically determined by the brokerage and are influenced by trading volume, so stocks of larger companies are more likely to be available for shorting. Check on any stocks you’re considering shorting within your brokerage account.

How do you know when a stock is heavily shorted?

The market keeps track of stocks that are sold short through a measure called short interest. You can look up a stock’s short interest in your brokerage account or on other market data websites.

Can I short sell stocks I already own?

Yes, you can sell short stocks that you own to protect your portfolio from a drop in price and avoid creating a taxable event. This is known as a short sell against the box and is a strategy utilized by long-term investors.

What is the best way to short a stock?

This depends on your risk profile. You can short a stock by buying inverse exchange-traded funds (ETFs), or you can directly short a stock via brokerage platforms. This means you would have to borrow the shares you want to short from the brokerage and sell them on the market. Shorting shares directly comes with additional fees and costs as opposed to inverse ETFs where you only pay either a small annual fee or no fee at all depending on the ETF.

Amy Bonnett, Author at Finder

Amy Bonnett

Author

Amy Bonnett is Finder's Personal Finance Producer. She works directly with our partners and editorial team to ensure that only the most accurate info makes its way to you. When she's not helping folks find the best credit card or savings account for their needs, you can find her out in her backyard playing with her rescue dogs, Freya and Leia.

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