02/09/2021
GameStop has been all the news lately beceause of an historic push back against short sellers. Curious what a short sell is?
A short sell takes place when an investor anticipates that the price of a stock will drop. Investors establish a level of relationship with their brokers where they become able to BORROW an amount of shares from another investor's portfolio. After the borrow, they SELL those shares at around market price. If the price does indeed drop then the short seller BUYS back the shares at the lower price, then gives the shares back to their broker, and then pockets the difference.
Clever, ain't it?
