betting against Facebook

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    Bet for FB:
    Buy facebook stock and other social network stocks. Considering that most social network driven apps does not come close to facebook, it would be wise to diversify your self to buy other stocks in similar category.

    Bet against facebook:
    There is no real competitor to facebook. Even if there was, you wouldnt bet against a competitor as most sectors flucutate in similar way. facebook goes up / down, a competitor moves the same way.

    Buying inverse / short:
    There is no real way for public or someone 'layperson' to short a stock unless there is an existing inverse security available. ETFs have broader inverse or short securities available for 'layperson' to invest in to. For example, you can bet against gold by buying DGZ or GLL and many others. These are established ETFs (fund). They tend to move either 2x or 3x the given movement of an underlying benchmark security. You can lose a lot or make a lot.

    Shorting is just a contract between you and another person or institution. In order for you to bet with an institution, Goldman, Morgan etc, you need to be approved not just by the bank by regulatory authority. You need to prove collateral indicating that you would pay if you lost (bank does the same). Additionally, you need to be approved and trusted by the bank. Even if you were approved, there has to be someone at the bank who is willing make a contract with you indicating that they will pay X amount if under lying security goes X in certain X time. You would also need to buy insurance against your bet to hedge and also as a regulatory requirement from places like AIG.

    See where I am going with this? Note this is why AIG and other banks failed. They made bets against each other. When things went sour, they couldn't pay, they go bust.

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