It’s not totally clear to me of what this is or how this works. And how to profit in the markets.
In: Economics
You borrow shares of a company’s stock you think will go down, and sell it. When the stock does go down, you buy shares to replace the ones you borrowed. The difference between the proceeds when you sold and the cost to replace is your profit.
So if a stock is at $100/sh and you want to short 100 shares. You borrow them from your brokerage firm and sell, gaining $10,000. When the stock falls to $70, you buy to cover your short position and only spend $7000 on the replacement shares. The $3000 difference is your profit on the transaction.
Latest Answers