A static archive of Markus Tacker's tweets. Follow me on Mastodon: @[email protected].
@pati_gallardo You can place a bet on a
stock to have a certain price by a certain date: I sell you 1000 shares of Stock
X for $1000 by 1.1.2021. You agree.
Now, if by 1.1.2021 the stock price is below $1 per shared, I make a profit,
because I can buy them for a lower price on the market.
@pati_gallardo However, if it is above, I
still will only get $1 per share from you, but have to buy it for more on the
market.
This is called "short selling".
https://www.investopedia.com/terms/s/shortselling.asp
@pati_gallardo Hedge funds use a lot of
cash to do this and similar investments on a huge scale. This is not per se bad
(it is also used to secure against exchange rate fluctuations). It's a tools to
use money to make more money.