HOLLYWOOD STOCK EXCHANGE
THE ENTERTAINMENT MARKET
THE ENTERTAINMENT MARKET
When you short a stock, you are betting that its price will fall.
Say you expect a particular moviestock is going to fall in price, and you short it at $50. The stock falls, just like you predicted, and you cover at $40. You'll get back your original investment of $50, plus a gain of $10 - the difference between the price you shorted and the price you covered at.
The risk with shorting is you may get it wrong and the stock price will rise. Let's say you short at $60 but the stock rises in price and you decide to cover at $60. You'll have lost $10 of your investment: $50 + ($50 - $60) = $40.
Shorting is best for short term gains - say, when there's bad news like a star pulling out of a movie, or a movie getting pushed back a few months. Obviously it's good for starbonds that will drop in value at their next adjust as well.
Can someone explain how the short/ cover option works? When is the right time to use it? Jun 30, 09:01
When you short a stock, you are betting that its price will fall. Jun 30, 20:01
Thanks for the info. {nm} Jul 04, 10:45
