Myth or not: Is it possible to sell stocks before you even buy them?

Question

How so?

Answer 1

It is not a myth.  You can do it.  You would do this by 'shorting' the stock through your broker.  In essence this means that you are 'borrowing' the stock from your broker and then you can sell it.  At this point you 'owe' the broker the number of stocks you 'borrowed' and you can buy them back on-market (hopefully when the price has gone down) and give the stock back to your broker thus closing out the transaction.  In certain circumstances the broker can 'call' back the stocks earlier than you may want to.

Remember that since you are borrowing, you pay interest and that shorting is a risky strategy for a range of reasons.

Answer 2

myth