someone explain to me how short-selling works
>pic unrelated
Buy high sell low
google it you lazy asshole
Watch the anime series Spice and Wolf S2
The first 6 episodes are about that, as well as trading with options
Short-selling is basically borrowing a stock and hoping the price falls so you can buy the stock back at a cheaper price and give it back.
Example:
You short AAPL when it's a 100 USD, so you have -1 in AAPL stocks
The price falls to 90 USD, you buy the stock back, now you have 0 AAPL stocks and 10 USD of profit
1) Borrow shares of the security, typically from a broker.
2) Sell the shares immediately at the market price.
3) Repurchase the shares (hopefully at a lower price) and return them to whoever you borrowed them from. After all this, you will pocket the difference if the share price has fallen, but will have lost money if the price went up
>>1258624
>>1258663
Pretty much this.
Since you're borrowing the stock, you have to pay the broker some sort of interest if you hold onto it too long. You're generally hoping the downturn in price happens soon.
Potential profits/losses are also the opposite of going long. Finite potential gains, infinite potential losses. This is why people can go into debt by shorting a stock that's about to take off.
>>1258640
wow, you are adjusted so badly for this life.
>>1258800
thanks
>>1258663
In reality, this is mostly done by buying or trading options.
For OP: This is done by purchasing a "put" where someone will agree to purchase so many(in blocks of 100) shares at a certain price.
So lets's say you buy the option to sell 100 shares of company XYZ at $55/share for 2.50 a share($250) and it expires on June 20th. Company XYZ is currently trading for $60 a share.
On June 19th company XYZ is trading for $45 a share. You buy 100 shares of XYZ and exercise your option and effectively make $7.50 per share.
It's fucking glorious to short when fucked up shit happens.
>pic related result of BP oil spill
>spill date: 20 April – 15 July 2010
>Greenpeace cucks yelling and protesting
>BP officials freaking out
>workers all cold and dirty stopping that shit
>everyone talks about the disaster
>shareholders watch how stock loses around 50% of it's value
>you're all comfy and enjoying your 50% profit in two month
>>1258638
oh god that made me kek hard
i mean it's true, but still
>>1258809
no and kill yourself.
>>1259037
>He doesn't short via covered puts.
What? Are you poor?
>>1258809
u had one thing to do....
>>1258952
>currently trading for $60 a share.
Did the SEC rule kick in during that time? I don't really understand that
>>1259191
Yeah, that's only if the percentage decline hits its limit during established trading hours (so 8 to 8).
Then it's trading halt city
>>1259056
I do, that imbecile was talking buying puts.
