BIG PROFITS FOR THE BORROWERS.
SHORTING is when investors, either themselves or through a broker, borrow shares in a company from someone who owns them.
They then sell the shares on the open market.
The investors gamble on the share price falling, perhaps because they think the shares are overvalued or because the firm faces tough times ahead.
If the share price falls, they then buy back the shares at the lower price, hand them back to whoever they borrowed them from, and keep the difference.
However, they can get caught out if they borrow shares, sell them, but the prices rises.
They then have to buy them back at a certain time, hand them back but take a hit on the difference.
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|Publication:||Daily Record (Glasgow, Scotland)|
|Date:||Apr 9, 2018|
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