A shorted stock is borrowed and not paid for yet by the hedge fund. The hedge fund was betting it was going to tank, and make a profit on it tanking. Instead, people found out that the hedge funds shorted the stock more than 100%, and the more the stock goes up, the more money the hedge fund will lose, because since they borrowed the stock and haven't paid for it yet, they'll have to pay it back at current stock price. This move could possibly bankrupt wall street. Latest I saw they're already down billions because of this.
they borrow the stock when it is higher and sell it. since the stock is borrowed from the owner, they need to give the same stock back to the owner.
that is what a short sale is about.
for example,
borrow 1 stock and sell it for 100, now buy the same stock for 40 and give the stock back to the owner. The person made 60 dollars thru this action since they sold it higher than they bought to replace it.
in this case, others bought the stock raising the price, the short sale person still has to replace the borrowed stock so they are forced to buy it also at the higher price and lose money.
yes, see other threads.. several stock sites td trade stop purchases and others had issues so customers couldn't do anything so the fund people could be safe due to their 5 masks ...
wish I knew about how it was basically 113% short sale, the fund companies caused the issue.
A shorted stock is borrowed and not paid for yet by the hedge fund. The hedge fund was betting it was going to tank, and make a profit on it tanking. Instead, people found out that the hedge funds shorted the stock more than 100%, and the more the stock goes up, the more money the hedge fund will lose, because since they borrowed the stock and haven't paid for it yet, they'll have to pay it back at current stock price. This move could possibly bankrupt wall street. Latest I saw they're already down billions because of this.
Can you explain the part on how someone makes a profit on a stock tanking
they borrow the stock when it is higher and sell it. since the stock is borrowed from the owner, they need to give the same stock back to the owner. that is what a short sale is about.
for example, borrow 1 stock and sell it for 100, now buy the same stock for 40 and give the stock back to the owner. The person made 60 dollars thru this action since they sold it higher than they bought to replace it.
in this case, others bought the stock raising the price, the short sale person still has to replace the borrowed stock so they are forced to buy it also at the higher price and lose money.
Will they be protected if they have three or more masks on?
yes, see other threads.. several stock sites td trade stop purchases and others had issues so customers couldn't do anything so the fund people could be safe due to their 5 masks ...
wish I knew about how it was basically 113% short sale, the fund companies caused the issue.
Because they pay back the borrowed stock at a lower price.