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thanks to this explain-like-I'm-five explanation, I finally understand how shorting stocks (in the real-world) works...

Posted by: tealfan on Mar 30, 15:49

Before, I couldn't understand how you could possibly make money on something going down in value.

You borrow my shovel.  Sell it for $25.  You then go to Home Depot and the shovels are on sale for $14.99.  You spend 15$ to replace my shovel and keep the $10.00 left.  Now replace the word "shovel" with "share" and multiply by 100 or more.

reddit.  (I fleshed it out a iittle bit:)





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