this post was submitted on 23 Apr 2024
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Shorting is when you borrow stocks and then immediately sell it. At some point you have to buy those stocks back so you can return the stocks to the lender.
Say you short 1 stock at $1000. The stock later drops to $100. You have made a good $900 profit when you return the stock.
Say the stock instead goes to $10,000. You have made a devastating $9000 loss. You have lost more than you initially shorted.
Yes I know but I meant that you don't have to do any of that yourself. You buy a bear or a mini and it's taken care of automatically when you buy or sell.