Houjun Liu

short selling

Short selling involves betting against the stock.

Process of Short Selling

  1. the trader borrows a number of shares from a third party
  2. the trader sells them immediately for cash
  3. when the security dips, the debt is repaid by repurchasing the same amount of shares of the borrowed security at the lower price
  4. traders nets the profit from the negative price differential

If the person shorting

short squeeze

“what happened to GameStock”

A short squeeze is a situation in which a bunch of people try to drive the price of the up by buying enough shares such that the short sellers are forced to sell high—driving up the price.