Bitcoin Forum

I made my first short selling earning a total somewhere around 14 bitcoins. Booya.

Recommend nanotube as the to-go guy for your first short selling loan.

great to hear that, kiba! :)

What do you mean by short selling

Something that will piss off communists like you.  ;)

*pimp slap

I'm not sure you should be proud of that but somehow I think it is good that this kind of thing is possible.

It gives liquidity to the market.  Plus, it's fun.

Although I would not do this kind of thing, I won't blame you.

If you think the price of BTC will go up, it's easy to make a profit. You simply buy some BTC for dollars, then sell them back after the price goes up.

If you think the price of BTC will go down, it's not quite so straightforward. But you can make a profit by doing this:

1. Sell BTC for dollars at the current, high price.
2. Borrow BTC from someone else, and deliver those BTC to your buyer.
3. After the price goes down, buy some BTC at the cheaper price and use those BTC to repay the person you borrowed BTC from.

Selling BTC (or stocks) that you don't own, but which you will buy later, is called short selling.

It's a gamble for the short-seller, because if prices go up instead of down they must buy later for a higher price than they sold, thereby making a loss. In addition, they must pay interest to the person who lent them the BTC.

Short selling has gained a bad reputation (because short sellers are often people with "inside knowledge" that prices are about to drop), but it does add liquidity to the market, and it tends to push prices towards their "true" value, by making the market price reflect that "inside knowledge".

According to the current SEC regs, you have to borrow first, before you can sell. selling first is called 'naked short' selling, which is no longer allowed. You can google/wikipedia for the associated problems with it and why it is no longer legal (in the usa, at least).


Inside knowledge doesn't really have any special relationship to short selling. People with inside knowledge of bad news, can short, people with inside knowledge of good news can go long.

But besides that, yes, short selling does add liquidity, and sanity, to the market, by allowing people to trade both on expected gains and expected losses.


just fyi, you could try http://bitcoin-otc/ for your OTC transactions. :)

Heh, irc is where all the action is! :)

BTC at $0.50.  Looks like we might be having our first short squeeze in history. ;D

Yes, I got burned.

I hope it wasn't too much.

The recent price action has certainly been wild.

at this time are somes exchangers that allow you to do shortselling?