$Futu Holdings Ltd (FUTU.US)$ How come it stonk so much? Wha...
$Futu Holdings Ltd (FUTU.US)$ How come it stonk so much? What the shit! I need to average up my shorts lioa.
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doctorpot1 : Hahaha you averaging up your shorts? you still want to short more at the current higher price? just be careful ah cause short payout sucks. unlimited loss but limited profit.
Kayla271 doctorpot1 : Wait does he mean he want to up his diluted cost price ?
doctorpot1 Kayla271 : He is shorting so the higher the cost the better for him. unlike taking a long position e.g. he short 1k shares for 7 so if he short another 1k shares for 9. That means his average is 8. so long the price of the share is below 8, he earn money. if he did not sell more at a higher price means he needs the share to drop below 7.
I'm only worried if the shares keep rising only, cause this stock quite heavily shorted and might induce a short squeeze. plus there are 4 institutions that put a target price of 10 to 12.5 for grab. more will come. so just worried
Kayla271 doctorpot1 : But I don’t get it, how does one buys at a higher price earns profit from any company. Shouldn’t like avg down or smth. Sorry, quite new here but heavily investing on futu![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
doctorpot1 Kayla271 : oh cause he is selling not buying. so the relation is inverse. he is shorting the shares. means he don't own any share, so he borrow the shares from moo moo, then sell it. he will have to buy it back later to return to moo moo. that's why when price drop, he earn. but when price goes up, he lose.
Kayla271 doctorpot1 : Is that using margin or smth? Anytime can go bankrupt kind?
doctorpot1 Kayla271 : yes to short you need a margin account because technically you can loss an unlimited amount of money. so you can lose everything in your account.
e.g. you short grab at $10 a share, so the best case is grab goes to $0 and you earn 10 a share (haven account for fees yet). But if grab goes up to $100 a share, you lose 90 a share. if grab goes to $1000 a share, you lose 990 a share.
Kayla271 doctorpot1 : wth, then why don’t ppl just be like us instead. That’s so risky leh
Kayla271 Kayla271 : And now it all came down to ur first reply and finally I get it lmao. I’m dumb
doctorpot1 Kayla271 : we are all learning :) don't worry. anyway as you are just beginning in your investment journey, here are some channel that you should learn from as they covers some general and basic concepts :)
https://youtube.com/c/KelvinLearnsInvesting
https://youtube.com/c/ThePlainBagel
Once you learn the basic there are more channels that focus on advance stuff.
one thing to note, ignore any YouTube ads saying FREE SEMINAR, all of them fake guru and are useless scammer. don't get scam. just learn for free from some Legit channel.
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