How to Short a Stock on thinkorswim | The Complete Guide
If you want to know how to short a stock on thinkorswim, it is just as easy as buying a stock.
However, there are additional considerations when shorting stocks, such as margin interest fees and account eligibility.
Key Takeaways
Shorting a stock is a trading strategy that involves borrowing shares of a stock and selling them, with the intention of buying them back at a later time at a lower price to make a profit.
To short a stock on thinkorswim, traders can use the trade tab or the active trader.
How to Short a Stock on thinkorswim Using Active Trader
The active trader is available on your chart tab on thinkorswim. On the right-hand side, click active trader to open it up.
You will notice that the left side of the active trader is red on the right side, signifying the ask size per price.
You can click on the red box to the right of the price you want to short a stock on ThinkorSwim, which will open the order window.
thinkorswim Active Trader
How to Short Sell on thinkorswim Using the Trade Tab
If you don’t want to use the active trader, you can also short a stock on thinkorswim under the trade tab, which is located to the left of the chart tab.
To open a short order, click on the red bid price at the top of the screen. Clicking this will open a sell order and allow you to short the stock, given you do not already own it.
thinkortwim Trade Tab
How to Short a Stock on thinkorswim Mobile App
Shorting a stock on the thinkorswim mobile app is convenient when trading on the go.
To short a stock on the thinkorswim mobile app, you must type in the stock ticker you want to short, then click the red sell button.
thinkorswim Mobile App
If you already own the stock, you cannot short it and will simply sell your shares.
However, if you don’t own the stock, you will see the order as a sell-to-open order meaning you will be shorting the stock when you submit it.
ThinkorSwim Mobile App Order Editor
How to Check if a Stock is on Short Sell Restriction on thinkorswim
If a stock is hard to borrow (HTB), thinkorswim will not allow you to short it.
However, you can apply for the HTB program to be accepted to short these stocks on thinkorswim.
Paying Interest Shorting Stocks
If you hold a short position for more than a day, you will pay margin interest to hold the position that compounds daily.
However, if you day trade a short position, you will not pay any margin interest.
The margin rates differ for each broker, so you can check your broker’s website to see how much interest you will pay.
thinkorswim Short Selling Account Requirements
To short a stock on thinkorswim, you must have a margin account. Shorting a stock with any broker without a margin account is impossible.
If you have a cash account, you can buy an inverse ETF as an alternative to shorting a stock. However, many stocks don’t have an inverse, so you will be limited to the stocks you can short.
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Consider this article about the thinkorswim opening range breakout for your research.
