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i leave a tip. The stocks that you want to short is never available for shorting in the CFD.
Having said that, The CFD is the best indicator that a overbought stock is rigged up and will come crashing down when you see ” no short, only long” signboard.
This mean the sydicate usually ‘lock’ up the the CFD sell orders first before conducting their push up. The syndicate will be the only one selling when they decide what the top is.
Dr Elder mentioned that a person should learn not only to buy shares but also to sell short. In Singapore, naked shorting beyond a day is a no-no. So what are some ways that someone can short the share ?
ReplyDear Yvette, you can use CFDs and extended settlement (ES) contracts, among others.
ReplyHi Martin. I think CFDs and ES contracts are now classified as SIPs by SGX. How do I go about learning more about these instruments and what would be your advise to newbies in learning/trying out shorting stocks.
ReplyThere is a learning module on the SIPs done by SGX. Have you had a look at it?
ReplyWhat do you mean by those who short-sell in the buying-in market, with a potential penalty of $50,000 and disbarment from participating in the buying-in market?
Buying in happens every day 1130 am, does tt mean tt if you naked short u must do it before 1130am to avoid getting penalised?
And of course subsequently to cover the short position before market close to avoid SGX buying in for you?
ReplyHi Chris,
Any naked short has to be bought back in the same day. Otherwise, you will incur the 5%/$1000 penalty.
These positions will then be closed by SGX for you on (T+3) in the buying-in market.
This is a special market which we can’t access directly (have to do it via our brokers). All trades in the buying-in market is done immediately. Which means that anyone who sells in the buying-in market needs to have the scrip already in his CDP.
Any joker who tries to sell in the buying-in market when he doesn’t already own the stock will get the $50,000 penalty and barred from future participation in it.
ReplyYes.
It’s actually the same as in the past just that this time round, you have to pay a fine of $1000 or 5% (whichever is more) for each failed trade.
This should be enough to deter many people.
ReplyThe timing is stipulated by SGX. Buy in is done automatically by them at 2 bids above.
Not too sure about the exact technicalities but bottom line is – don’t naked short.
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