I know little-to-nothing about stock trading. Can someone please give me the "Dummie's" version of

[PurgedVoter]

10. A Simple Explaination of Shorting Stock.

I borrow a bag of sugar from you because I know someone who will pay the current value for it and I suspect the price of sugar will go down.

If sugar goes down in price then when I buy a bag to give back to you next week, I made a profit. I only do this when I think I have a sure bet. If next week the price of sugar goes down I can profit by the reduction of price. If however the price of sugar goes up, I am on the hook and have to pay the new value.

If the sugar I borrowed from you cost five dollars, then the most I can possibly make is five dollars if sugar becomes free. If however that amount of sugar now costs a million dollars I loose five dollars less than a million dollars.

So the potential loss vs potential gain of shorting stock makes it dangerous. It also makes me, as the snake that is using your sugar to make money, interested in having sugar go down in value. This means that by allowing shorting to be used as an investment tool, I allow a bias that profits on the failure of business. Since the creation of stock exchanges was based on the theory that it would help with job creation and the success of businesses, this is dirty pool.

This is the problem with stock exchange in general. There are ample opportunities to make a profit off of the misfortune of others. There are even more dangerous things that these high dollar markets can do.

Now that water can be speculated on in the commodities market, a person can make a fortune by manipulating the availability of water. This puts the common man at risk. It puts crops at risk, health at risk. Water being put on the commodities market means that someone rich might just want to persuade officials to not make good decisions.