Saturday School: The Basics of Shorting a Stock

Watch this video to learn how you can make money on a stock that you believe will soon tumble — and to understand the risks of such a move.

Saturday School: The Basics of Shorting a Stock Photo by ANDRANIK HAKOBYAN / Shutterstock.com

Most people buy a stock in hopes that it will rise in value and make them richer. But you can also make money on a stock that you believe will soon tumble.

When you “short” a stock, you’re gambling that the price will decline at some point in the future. Watch this video from the Khan Academy to learn the basics of shorting a stock — and what can happen if your guess about the stock’s future is wrong.

Have you ever shorted a stock? Share your experience by commenting below or on our Facebook page.

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