I understand that it means betting against a company’s future prosperity in value.
But why is that a thing?
How does it actually work?
Who are you buying from/selling to, when you practice this?
Sounds more similar to gambling than to constructive investment.
🙏
In: 9
You pay someone a fee to borrow x shares.
If you are shorting then you sell the shares now and then rebuy the shares later hoping prices will fall.
If you succeed then you pocket the difference and return the shares back to their original owner.
If you fail then you lose money buying the shares back at a higher price and return them back to the original owner.
The original owner doesn’t care either way as long as they get all their shares back and they get the fee money on top of that “for free”.
Latest Answers