When one "shorts" a stock, is that like betting on a horse to come in third inst

  1. wingedcentaur profile image83
    wingedcentaurposted 7 years ago

    When one "shorts" a stock, is that like betting on a horse to come in third instead of first?

  2. ASKANALYST profile image61
    ASKANALYSTposted 7 years ago

    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.
    Regards
    http://www.indian-share-tips.com/

  3. MicahI profile image83
    MicahIposted 6 years ago

    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."

 
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