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In reply to the discussion: Trump Media alerts Nasdaq to potential market manipulation from 'naked' short selling of DJT stock [View all]Marthe48
(23,500 posts)but I don't understand the steps. A person borrows shares. They sell the shares they borrowed. If the stocks lose value, the person who sold the shares benefits by buying the shares back at that lower value. If the stock increases in value, the seller loses money on the stock they borrowed and sold. It seems to be a bet against a stock rising in value.
Why do they have to borrow shares? If they own shares, can they short sell those? Does the entity they borrow shares from benefit in any way from a short sale? Does the person who borrowed the shares have to buy them back if they increase in value? I don't understand how this strategy actually works. Any links that would help me understand? Thank you
In the meantime, whether I own shares or not, here's hoping that traitor and his henchmen go broke.
I don't have a perfect understanding, but I understand the basics a little better