How to Sell Stocks Short
How to Make Money in Bad Times:
The stock market goes up and down, but many people only believe you can make money when stocks are going up. This is false. You can profit when the market goes up, down, and even sideways. Selling short is more for the advanced investor, but the concept is still fairly simple. You borrow shares and sell them to someone else for the current price, then when the stock falls, you pay back your shares at the lower price and keep the difference. Before we get into strategies, lets first use an example of how this works: say stock "ABC" is selling for $25 and you think it will go down. You "borrow" shares and sell them at their current price of $25. Since you "borrowed" the shares you just sold, you need to repay or buy back those shares. Before you pay them back, you watch as the stock drops in price. Say, for example, stock "ABC" has now dropped down to $15. Now would be an excellent time to buy back those shares because you sold them for $25 each but you only have to pay back $15 each! You get to keep the difference of $10 each. When executed properly, selling short can bring great rewards to your portfolio. If you want to learn the best strategies on how to make money selling stocks short, then I have the perfect book for you to read:
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