Deyannis
Active Member
When you borrow shares, you immediately sell these. But the person who lent you the shares wants it back EVENTUALLY. So, you borrow a single share at $10, sell it at $10, and you're betting it hits $7 (or lower), at which point you BUY that share back so you can give it back to the person/institution that lent it to you. However, you pocket the difference ($3). A win! In the GME scenario, the retail investors saw that these hedge funds were doing just that - shorting it at $19 - and rather than letting them "win" they agreed to buy it UP. So, when the hedge funds borrowed millions of shares at $19 (to give it back to the lender say at $10 and pocketing the difference), it actually WENT UP instead of down. They had to cover their bet much, much, higher and lost a ton of money. Understand everyone? (And the lender of the shares calls in the loaned share....why is this important? Because at some point the hedge funds probably decided to buy GME for real. That is waving the white flag and still losing, because the lender might wait until that $19 goes to $200 before demanding you give them back those borrowed shares. It's a form of investing that is laden with tragic irony when it does not work because the short seller likely bought in for real at some point, thus driving sp UP themselves, and still having to use all that of that profit on their buying to give back to the lender.) Should you short GME now? I would not. It's a 50/50 gamble that either goes to $40 in no time at all, or goes to $1,000.Are you in on the GME and AMC revolution? We taking out Wall Street. LOL!
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