How to short a stock
- Go to your broker and find out if your target has shares available for you to borrow. …
- Take the shares that you’ve borrowed and sell them on the open market.
- At some future date, buy back the shares, hopefully at a price that’s cheaper than what it was when you sold the shares.
What is a high institutional ownership?
When a stock has high institutional ownership, it is usually a good sign. If the institutions — which include large investment banks, mutual funds and pension funds — are the smart money in the market, having them invest in the company indicates the company is doing well.
Is high institutional ownership bad?
O’Neil and Lynch both agree that institutional ownership can be dangerous. These big institutions move in and out of positions in very large blocks so they cannot buy or sell holdings gracefully. If something goes wrong with a company and all its big owners sell en masse, the stock’s value will plunge.