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yetanother-1 | 1 year ago

But unlike stock buying, shorting can cause huge damage more the the starting value.

If you short a stock at 100, and it reaches 10, you pay back at 10 and get to keep the remaining 90.

If, however, that stock reaches 300, you have to pay the extra 200 from your pocket.

So shorting is much bigger risk than investing directly in stocks.

discuss

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Cupertino95014|1 year ago

That's if you actually borrow the stock & sell it, the old-fashioned way.

There are less risky ways, like buying a put option.