Borrow Stocks

[Suba]

Borrowing stocks is often done by investors at stock brokers or stock lenders, to borrow stocks we must deposit a certain amount of money as collateral, and we will also be charged interest and fees. These investors will borrow stocks when prices are high or even peak and immediately sell them on the market. High prices usually occur around Christmas to New Year. When the January effect occurs, stock prices fall and investors will buy stocks and return the stocks plus interest and fees. Investors will make a profit from the difference between the loan/sell price and the purchase price, what do you think?

 

[Fidelia]

I have never really heard that one can borrow stocks. What if the stock prices go up unexpectedly and I am still under the borrowing contract. What then happens?

 

[Suba]

To borrow stocks must be done at a certain moment or stock cycle, and also when there are financial fluctuations or inflation so that it will affect the capital market, you must also have strong fundamental analysis skills. If an unexpected event occurs and the price goes up, it means you lose.