Is Swing trading legal? – Swing In Stock Market

Is Swing trading legal? – Swing In Stock Market

No, as explained by the FTC in this video:

“Swing Trading involves the purchase of or the sale of securities, including the right to purchase or sell securities before open markets, or to hold securities pending an open market purchase or sale. It can also be a method of short selling.”

Does short selling carry a risk?


The risk associated with short selling is the price of the security being influenced by the movements in the stock market. This happens for two main reasons:

Price will go up or down during a short selling. You may be able to achieve a loss in the short seller, but if the price goes up, then you are likely to continue shorting. Price will decrease during a short selling attempt. If you fail to buy a stock, your short seller may get a refund or get you a new account that you will lose the money in.

Short selling is a way to make a profit by driving down the price of a stock so you can eventually sell your asset, thus turning a profit when the stock price goes back up.

What is this all about?

This is a very common strategy in the stock market. Short selling involves short selling the common stock of a company and transferring the stock at a loss. In the case of the Apple IPO, we will find that over the past three years Apple has over 2 million shares traded short daily. This is over two hundred million shares spread across the two main exchanges (IPO and NASDAQ). So, a short seller with a short position in a company may lose money by the way of commission, which you can read on the short sellers page of a broker-dealer.

Apple was hit with a sell-off in September 2012, which forced a short sale. As explained by the Apple insider, “Apple is a very large company of which many employees would lose their jobs if it was taken over.”

So, in the eyes of the law, Apple did indeed short sell. It is also an insider trading offense under state trading statutes. If you want to know about the short selling offense, you can read this article from the SEC. So, if you want to find out the legality of short selling, get a certified broker-dealer or a licensed attorney to help to look into the legalities of this situation you may find illegal.

So, is there a difference in short selling from stock purchases?

Short selling on stock is legal when

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