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Sigstroker@xxxxxxx wrote:
> Theoretically, I suppose. It will never happen in real life. First,
> you'd need a mountain of margin. Second, there will be many stocks
> that you won't be able to borrow because demand will have "used up"
> all the borrowable stock.
Not true....
First:
How much margin you have is not important. You just sel as
much stocks as your margin allows. If you only have $1000
that might mean selling only 1 stock each but still it will be
possible.
Second:
Most traders have a long bias. IB (or any broker) will alway's
have more people long in a stock than short. That means that
the chance of stocks being "used up" is VERY low. It might
only happen with stocks that are not so actively traded so that
not many people are long those stocks. (with IB, biggest broker
i know, that chance is again VERY low)
So both points are not true in practise.
However, comming back to shorting all Nasdaq stocks, why
not just sell 1 future contract. Much cheaper and easier to
handle. Might be that not every stock is evenly weighted in
the nasdaq but that "disadvantage" (i would see it as an advantage)
is easily made up for with transaction costs etc. etc.
greetings
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