A short thread about short positions, and not at all about Brexit.
In the stock trading world, taking a "short position", or "short selling", means borrowing shares from your brokerage firm, selling them at current value, and then paying for them in the future at whatever value they are then.
If you have reason to believe that the value of the shares is going to drop significantly for some reason, then short selling is a way to make money from that decline.
Example: I borrow 10,000 Facebook shares and sell them right now for $1.35 million. Next week, Zuckerberg explodes during a CNN interview and Facebook stock loses 90% of its value. I buy 10,000 shares for $135K, return them to the broker, and keep the $1.215 million difference.
Now, if I borrow shares and sell them and the stock price goes up, then I still have to buy the shares back to repay my debt. If Facebook stock somehow doubles in value, I'm down $1.35 million. Ouch.
Now, imagine you could engineer some kind of economic disaster that would wipe billions off the face value of a whole range of stocks, and you could short all of them. You could make a fortune.
Now imagine you (or your husband) are a hedge fund manager or investor or a partner in an investment firm. Imagine you've shorted a whole range of stocks because you knew that economic disaster was going to destroy their value.
Now imagine that if, for some reason, that economic disaster didn't happen, you stood to lose EVERYTHING, and probably still not be able to pay your debts. Imagine how you might behave in those circumstances.
Now...
Now watch the news.
Now...
Now watch the news.
