Best easy way to short a stock?

[SpeckledJim]

Per the title really.

CFD?

[DaveA8]

The simple answer is yes a CFD, the correct answer is be very careful with stock specific shorts as there is a wide array of potential issues that could cause a lot of pain.

Liquidity
Takeovers
Market sentiment
Your provider and their margin requirements
Volatility

It’s easy to be shaken out of a short that on paper seems rational and such events come at the worst times.
Not meant from an inside trading point but if one has some insight that is not yet widely appreciated then it’s possible but short selling is in general terms swimming against the tide.
Most things comeback to a liquidity squeeze, think carefully before entering because once you’re in you need to ensure that you have absolutely decided an exit plan and stick with it, creep is another killer is shorting.
A lot of the well known shorts are more calls on a market, again less likely to have a serious melt up than a specific stock.
The nightmare is waking up to a takeover event, also unless you can buy a guaranteed stop, that tells you what the broker thinks because they’ll only do such stops if they’re happy, in fact I can’t recall if they are available on individual stocks anymore
If you like sleeping well consider carefully this type of trade

[DonkeyApple]

SpeckledJim said:

Per the title really.

CFD?

It's going to depend on the stock and time period as well as your tax situation.

CFDs and Spreadbets are the same thing. The only difference is the tax situation. As a U.K. taxpayer the default preference would always be to use a spreadbet. Both swerve Stamp but the CFD has the CGT implications.

With either you need to find a bookmaker who isn't a complete bookmaker, ie avoid the sthouse passported in bookies. When it comes to equities this is probably less of an issue as very few offer any equities beyond the usual idiot stocks like FB, Tesla and the memes etc.

Time period is important as the OTC brokers have all massively ratcheted up their funding charges over the last decade. Some are even able to get away with 4% over. This is because very few clients in the industry have functioning brains and don't care about funding costs because the gains on their trades will make the millionaires overnight as predicted by the guru all idiots have.

Next important factor is the volatility of the stock. Unfortunately most people want to short junk stocks as opposed to blue chips so this can hold various implications. The most obvious being price volatility and an overnight close out.

No OTC broker wants investment customers or penny share punters. The reason for this is that as a LR OTC broker it's your balance sheet cash, not the clients, that is used to hold the hedge and you have to hedge non blue chip equity positions. The end client invariably then ends up sitting on a losing trade sometimes for months, even years and while they're paying you funding you're losing money as it's your capital tied up at the clearers and the client account is costing you more to keep open than its paying in funding charges.

This means it can be worth fully funding the position so that there is no means for the bookmaker to slip a close or to worry about margin changes that occur from time to time.

If it's a dodgy smallcap you want to short then there is probably only the one broker in the U.K. worth dealing with unless it's a very short term punt otherwise the least risky would probably be IG.

Can you share any additional details such as mkt cap, liquidity, sector and expected duration/reasoning?