Tuesday, February 28, 2017

sell short

most people buy a stock at 10 and sell it as 25, they buy and sell to make a profit

selling short reverses the process by which the profit is made. You sell the stock at 25 and then buy it at 10. How do u sell it if u don't first have it? You borrow the stock from sb. Eg., u go JP Morgan and borrow 100 shares of stock and sell the stock at 25, which is its current price. Then sell it because u think it will be going down in value. So when it goes to 10, u buy 100 shares and give them to JP Morgan. The bank has its 100 shares back. U have ur profit.

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