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Shorting a stock is like taking out a loan, but when you pay it back, you don't pay it back at the value you started with, but at the new value. So, if you shorted starting at $100, and it's now worth $10, you could keep those $90, and pay back just the $10.


But unlike stock buying, shorting can cause huge damage more the the starting value.

If you short a stock at 100, and it reaches 10, you pay back at 10 and get to keep the remaining 90.

If, however, that stock reaches 300, you have to pay the extra 200 from your pocket.

So shorting is much bigger risk than investing directly in stocks.


That's if you actually borrow the stock & sell it, the old-fashioned way.

There are less risky ways, like buying a put option.




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