RE: A Simple Example of Shorting the U.S. Dollar With BitShares

[wingz]

I see what you mean. Let's simplify it further though.

If I use USD to buy some cigarettes cheaply and then sell them for a higher price, am I shorting the USD?

Comments

[billbutler]

I would answer yes. You decided to hold an asset (cigarettes) that you felt would appreciate relative to USD.

[lukestokes]

No, but the USD wouldn't be on loan, right? If so, then... yes, maybe that would be a short?

Here's how I understand what a short is:

Short selling is the sale of a security that is not owned by the seller, or that the seller has borrowed. Short selling is motivated by the belief that a security's price will decline, enabling it to be bought back at a lower price to make a profit.

bitUSD's in my example are created via borrowing.

[wingz]

I think the whole borrowing angle comes from stocks. As unlike futures markets you need to borrow stocks from long term holders in order to short.

Taking a currency on margin, is different to borrowing a stock.

In my head there's something very different to a security and a currency.

If you buy something with dollars, even margined, borrowed dollars .. I don't think it's shorting dollars unless what you're buying is another currency or something 'big' rather than just a small asset.

Can you see that perspective?

[lukestokes]

unless what you're buying is another currency

Which is the case here, yes? Unless cryptocurrencies are not currencies?

I see that perspective, but what I'm describing seems much like what I find when I Google what it means to short a currency. Either way, thanks for clarifying your perspective.