What is the time frame for buying back stocks after short selling?

February 28th, 2008 | by admin |
The Dude asked:


In other words, how long can it be to buy back stocks after short selling a stock? Can you short sell any high stock and wait for the next presidential election to buy back?

  1. 5 Responses to “What is the time frame for buying back stocks after short selling?”

  2. By introverted_guy on Feb 28, 2008 | Reply

    There is no time frame. Just like you can buy and hold a stock forever, you can short a stock without buying it back forever.

    EDIT: Regarding interest, my broker only charges interest if you sold short and then the stock goes up. If you sold short and the stock is down, they do not charge you interest.

  3. By Chris on Mar 1, 2008 | Reply

    You are subject to a timeframe on the short sale but it’s a financial one not a regulatory one. When you short a stock you borrow it from the broker and you have to pay margin interest on that borrowed amount.

    Margin interest is not a good deal until you get into huge balances (but big balances are still a decent amount of money) for long term purchases. You could offset the short with long calls but that costs something also (commission+premium).

    Eventually if you are short long enough the potential gain will be offset by the actual loss on margin interest or option comissions and premium. Depending on the amounts and term you’ll have to do the math. The most you can gain on a short is the sale price all the way to zero but the upside risks are virtually unlimited so be careful with speculative issues.

  4. By bob shark on Mar 2, 2008 | Reply

    Keep it sold short as long as you want, But of course you will pay broker interest for all the time you are short sold and you wioll have to meet margine calls anytime the stock rises above your sellpoint.

  5. By ll on Mar 4, 2008 | Reply

    The timing for different stocks is different. Check which analyzes lots of data and shows a list of overvalued and undervalued stocks plus the timing of the trend.

  6. By Bob on Mar 6, 2008 | Reply

    No time frame..depends on how much risk you’re willing to take.

    If the stock starts to go up in an hour after you shorted and your risk is low, you might start buying right away.

    So, once you start shorting, follow the stock and analyze trends and the news. On the first good news, but it back or you lose your shirt.

    hope that helps.

    Bob.

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