When one "shorts" a stock, is that like betting on a horse to come in third instead of first?
Shorting means that one is selling the stock in the market with a view that stock is going to fall. One may or may not be holding the stocks and in that scenario for intraday one has to cover position by end of the day.
Shorting a stock means that you borrow shares from your broker with a promise to give them back in the future. For example, if McDonald's stock was trading at $70/share, you would borrow from your broker at that price. If the stock price later fell to $60 a share, you would buy back shares in the open market for $60, and give them back to your broker, satisfying your debt requirements. After the transaction, you would be left with $10/share.
So to answer your question, yes. Shorting a stock is betting that it will fall instead of rise, or "come in third instead of first."
by delhi8 years ago
how to make money by shorting
by Mentalist acer7 years ago
What are the ramifications of shorting a stock in the stock market,and how does one make money by doing so?Break this down in English Please?
by agusfanani3 years ago
Do you share the same opinion that prices of some stocks in stock markets are engineered ?
by pankaj mahajan7 years ago
how to invest money in share market
by rams chowdary5 years ago
why the company s registered in the stock market or share market ?
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