How can you earn income for owning short positions?

Jim Chanos talks with CNBC about shorting tesla

He says that: “for most short positions you earn income”

You receive the financing rate when you short an index (so you sell it above the index price)

READ  When Is Short Selling Fraudulent?

On something like tesla your short borrow costs are generally above the cost of financing so you don’t get paid, but in the index space you def do. Particularly if you’re willing to lend Russell 2k index the short financing you’ll be getting is usually 15-30bps over 3m libor

READ  GameStop Short-Sellers Have Lost $1.9 Billion in Just 2 Days Amid the Stock’s Latest Spike

 

h/t enginerd03

 

Disclaimer: Consult your financial professional before making any investment decision.

665 views

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.