– What does it mean to short a company?

Question

I assume this is related to stocks and investing, but what does it mean short a stock? Like I’ve seen people asking if it’s time to short Netflix.

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Answer 1

To “short” a stock means to bet that the stock price will go down. This is done by borrowing shares of the stock from a broker and then selling them in the market. If the stock price falls, the investor can buy back the shares at a lower price, return them to the broker, and make a profit. If the stock price rises, the investor will have to buy back the shares at a higher price, resulting in a loss. In the example you mentioned, someone might be asking if it’s a good time to “short” Netflix stock, meaning that they think the stock price will go down and they will make a profit.