Question by : How is money made betting ‘against’ the market?
I understand how you can make money betting on the market going up. You would make a purchase, keep it, then sell it once the market goes up. What I can’t understand is how someone makes money betting on the market going down. Please explain.
Answer by jeff410
Its called short selling. You borrow shares of stock from your broker and sell them. The proceeds are kept in an account with the broker. When the price goes down you buy the stock back and give the broker the stock back you borrowed and you profit on the difference,
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