How-to: Company Pages
How to: Discovery
How-to: Portfolio Holdings
How to: Activity
How to: Leaderboard
How to: Performance
How to: Challenges
How to Trade
What are some basic Financial Vocabulary?
How to get recruited using EquitySim
Fixing Account Errors
My Trade is not being processed
An investment in my portfolio is showing up as $0
Stock splits, mergers + acquisitions
I can't find a specific investment
I can't sign-up
My credit card is being declined
What is a Stock?
How to Choose a Stock
Active Trading vs Portfolio Management
How to start testing multiple strategies
What is Portfolio Management Strategy?
How to Build a Basic ETF Portfolio
What is an ETF?
How to Choose ETFs
What is a Bond?
What is an Option?
What are Trading Strategies?
What is short selling?
Understanding Metrics / Data
What is Diversification?
What is the Diversification Score?
What are asset-classes?
What is Geopolitical Exposure?
What is Industry Diversification?
What is Geographical Diversification?
What is Industry Exposure?
How do I read the Diversification Radar Chart?
How to read impact on diversification
What is a good Sharpe Ratio?
What is Sharpe Ratio?
What are average excess returns?
How to Improve Sharpe Ratio
How do I measure risk?
What is Return?
What is Volatility?
Credit-Suisse Investment Challenge
Recording your Strategies and Rationales
Showcasing your work on EquitySim
Adding structure to your interview answers
Preparing for the interview
Preparing for the Sales + Trading Interview
Credit-Suisse: 2019 Case Study
2019 Credit Suisse Investment Challenge [Fall]
2020 Credit Suisse Investment Challenge [Fall]
2020 Credit Suisse Investment Challenge [Summer]
Host your own EquitySim Challenge
Can users share an account?
How do I export classroom data?
How do I delete, archive and edit my class?
Challenge Setting Types
How does EquitySim compare to other simulations?
What is EquitySim?
Can I undo a trade?
How are prices determined in the simulation?
Why didn't my trade execute immediately?
How do I exchange currency?
Why isn't my ranking showing up?
What are Public Portfolios?
How do I switch between portfolios?
How am I Graded?
Does EquitySim have sample assignments for my curriculum?
How are Options priced in the simulation?
How do I find my daily portfolio change?
How do the Portfolio Emails Work?
Is my data confidential?
How do I delete my account?
How our simulations reflect the real-world
What can I trade on EquitySim?
What is a good rationale?
How to set-up your team
What are the different order types?
Which government bonds can I trade?
Updated by Justin Ling
When you short-sell securities you are effectively borrowing the security from someone else so that you can sell it today. When you "cover short" you pay back the security.
Why do this?
You would do this because you believe the selling price of the security (today) is attractive, and that in the price will be lower than it is today. Short-selling enables you to take advantage of this by borrowing to sell something you do not own.
Mike, Jim and Lily are market participants.
Mike wants to buy Tesla stock at $420 (this is the current bid for Tesla).
Jim thinks selling here would be profitable, but he does not own any Tesla.
Lily owns 1 share of Tesla but thinks Tesla is a great investment and would not sell it at this price.
Short-selling allows Jim to borrow the 1 share of Tesla from Lily to sell it to Mike today at $420. Jim now gains +$420 from the sale, but now owns minus 1 share of Tesla (the share he owes Lily).
In the future, if Tesla's price decreases below $420 Jim can buy the share back and repay Lily, generating a profit. But if the share increases in price, he'll be on the hook to repay her the share at the higher price and create a loss.
Limits to Short Selling / Margin
As Short selling is borrowing, brokerages put a limit as to how much you can short sell, to ensure you are able to pay back what you have borrowed (even if things go sideways).
At EquitySim the Margin or Borrowing limit is 50% of the value of your account.