betting against Facebook
betting against Facebook
Out of context: Reply #14
- Started
- Last post
- 49 Responses
- 20020
Short selling:
You can do this with most trading account. You are borrowing shares and when the price falls, you buy them back.
This is how it works.
On your behalf, your broker borrows 100 shares of stock A at $5 and sells them. In your account, you have $500. When the stock falls to $2, you buy them back at $2 and gives back the shares. You just made $300.The opposite.
You tell your broker to borrow 100 shares of stock A at price of $5 and that is sold. You again have $500 in your account. The stock moves up to $10. The shares are borrowed and you need to give back the shares. In order for you to give back the shares, you need to buy the shares at the current price of $10. You pay $1000 total to give back the shares. Your account -$500.