How Short Selling Works

If you'd like to support the channel, you can do so at Patreon.com/ThePlainBagel :)
Short selling lets investors bet against a stock, profiting when it falls in price, but how exactly does a short work? We'll discuss the process and the risks it entails in today's video!
Intro/Outro Music: www.bensound.com/royalty-free...
DISCLAIMER:
This channel is for education purposes only and is not affiliated with any financial institution. Richard Coffin is not registered to provide investment advice and as such does not provide recommendations on The Plain Bagel - those looking for investment advice should seek out a registered professional. Richard is not responsible for investment actions taken by viewers.

Пікірлер: 2 500

  • @ThePlainBagel
    @ThePlainBagel5 жыл бұрын

    What are some companies you've thought about shorting? Knowing the risks, would you go through with it? Let me know!

  • @RicardoVladimirWong

    @RicardoVladimirWong

    5 жыл бұрын

    The Plain Bagel Co. Lol

  • @ThePlainBagel

    @ThePlainBagel

    5 жыл бұрын

    @@RicardoVladimirWong you shut your mouth

  • @simonchau8675

    @simonchau8675

    5 жыл бұрын

    I was watching some of the REIT companies.

  • @danjowithbanjo

    @danjowithbanjo

    5 жыл бұрын

    @@simonchau8675 you'd have to pay the dividends as mentioned though

  • @simonchau8675

    @simonchau8675

    5 жыл бұрын

    @@danjowithbanjo oh I know I was just wondering about them cause there seems to be more and more vacancies I'm noticing in the Canadian cities

  • @jahjoeka
    @jahjoeka4 жыл бұрын

    I should start shorting because every stock i pick goes down.

  • @King-bx4ch

    @King-bx4ch

    4 жыл бұрын

    I should go long because every stock i short goes up

  • @redbaron827

    @redbaron827

    4 жыл бұрын

    Bogdanoff won't be happy

  • @kylenetherwood8734

    @kylenetherwood8734

    4 жыл бұрын

    I know it's a joke but you should just buy index funds

  • @jahjoeka

    @jahjoeka

    4 жыл бұрын

    @@kylenetherwood8734 that's the second time i heard that. I have an ira so maybe i put it all in an index.

  • @fitrianhidayat

    @fitrianhidayat

    4 жыл бұрын

    @@kylenetherwood8734 I'm not an expert by any means, but is it possible that index funds are also a bubble? I mean, I keep hearing people say that it will definitely go up, and you won't lose money there, which for me, is kinda alarming

  • @samuelm5140
    @samuelm51403 жыл бұрын

    Headcount: who's here after $GME??

  • @insertname383

    @insertname383

    3 жыл бұрын

    Gotta educate my smooth brain to get that first wrinkle

  • @asdasddas100

    @asdasddas100

    3 жыл бұрын

    Same

  • @MrKamotodragon

    @MrKamotodragon

    3 жыл бұрын

    Eventually, it's going to come back to earth!

  • @Jumpingjackflash123

    @Jumpingjackflash123

    3 жыл бұрын

    Me after missing out :( next time tho. Maybe on BB

  • @MrKamotodragon

    @MrKamotodragon

    3 жыл бұрын

    @@Jumpingjackflash123 That's what I'm betting on. Lots of folks with lots of money. I expect all the popular WSB stocks to jump. Just hoping BB will be the biggest.

  • @muhammadwaqas6102
    @muhammadwaqas61023 жыл бұрын

    You could lose an infinite amount of money THEORETICALLY. Looks like the guys at reddit are really testing that theory.

  • @lindsey7544

    @lindsey7544

    3 жыл бұрын

    LMFAOO

  • @TNTITAN

    @TNTITAN

    3 жыл бұрын

    They aren’t the one testing it. The hedge farms are.

  • @thedalillama

    @thedalillama

    3 жыл бұрын

    If we had infinite amounts of money to lose, why would we bother investing? Seems like a lot of extra work. It certainly would cut into the time I'd have to spend it.

  • @TNTITAN

    @TNTITAN

    3 жыл бұрын

    @@thedalillama I don’t know talk to the farms that lost 20 billion in an attempt to make GameStop fail faster.

  • @thedalillama

    @thedalillama

    3 жыл бұрын

    @@TNTITAN How does shorting a stock make a business fail. I keep reading that, but it wasn't explained in the video. Sounds like you know.

  • @rasdan1192
    @rasdan11923 жыл бұрын

    2008 : The Big Short 2021 : The MEME Short

  • @martinoland1

    @martinoland1

    3 жыл бұрын

    More like the GMEME short

  • @Geyservillespeedshop
    @Geyservillespeedshop3 жыл бұрын

    POV you're here because of GME and wallstreet bets

  • @bigtay522

    @bigtay522

    3 жыл бұрын

    Damn skippy. I'm too stupid to read it. I've gotta watch a video 10 times to get half of it.

  • @468fujhffy

    @468fujhffy

    3 жыл бұрын

    😂😂😂😂

  • @MiguelLuna1

    @MiguelLuna1

    3 жыл бұрын

    Anyone got other videos to understand more about this?

  • @jtgirl24

    @jtgirl24

    3 жыл бұрын

    Yep

  • @Geyservillespeedshop

    @Geyservillespeedshop

    3 жыл бұрын

    @@MiguelLuna1 look up derivatives and how they work on youtube

  • @NickWright
    @NickWright4 жыл бұрын

    By far the best breakdown of shorting on KZread.

  • @EnergeticGiraffes

    @EnergeticGiraffes

    3 жыл бұрын

    Swole man making smart investment decisions I see you man! My older brother used to talk about you & your channel since 2011 so it's pretty cool seeing you here. I hope you're doing well man & good luck to us both!!

  • @NickWright

    @NickWright

    3 жыл бұрын

    @@EnergeticGiraffes Appreciate it man! Super cool about your brother. Hope you’re both well 👊🏼

  • @SantaBarbaraDianne

    @SantaBarbaraDianne

    3 жыл бұрын

    I agree! Everyone else is like reading the Wikipedia description which is very confusing! While this guy is great , I think the cartoon animals talking about what Quantitive Easing (QEs) is was classic

  • @LemonChieff

    @LemonChieff

    3 жыл бұрын

    you hot

  • @xdecker1179

    @xdecker1179

    3 жыл бұрын

    My brain can’t comprehend any of what investor b does

  • @blongshanks77
    @blongshanks773 жыл бұрын

    This was literally the best description of short selling I’ve heard on KZread. Finally, someone with a simple explanation with great animations included. Thank you!

  • @nO_d3N1AL
    @nO_d3N1AL3 жыл бұрын

    The one thing I struggled with was how you can "borrow" shares and sell them, and this video covers it VERY briefly, but more thoroughly than any other source I've found. Basically it's like taking out a loan but in the form of shares, as I understand it

  • @greatalbert

    @greatalbert

    3 жыл бұрын

    The institution that maintains your margin account borrows the shares for you. Since most stocks are held in a "street name", i.e. the name of the institution -- Schwab, or Fidelty or e-Trade, etc., they technically have ownership of most of the shares in their clients' accounts. They can make use of those shares to deliver to a buyer the stock you short. If they run out of shares of a particular stock they can still try to arrange to borrow the shares they need from another institution.

  • @Katlick

    @Katlick

    2 жыл бұрын

    I came here to understand how one can borrow and sell also

  • @mobilegameclips5628

    @mobilegameclips5628

    2 жыл бұрын

    @@Katlick it’s no different than borrowing $500k from a bank and “selling it” to a homeowner in exchange for their home.

  • @guyeshel9316

    @guyeshel9316

    2 жыл бұрын

    @@mobilegameclips5628 And what are you giving back to the bank is such case?

  • @PoKeKidMPK1

    @PoKeKidMPK1

    2 жыл бұрын

    @@guyeshel9316 um money? its a loan you have to pay an interest fee on shorting because you borrow, if you didnt it would be free money.

  • @krusz2468
    @krusz24683 жыл бұрын

    Had to come watch this during the current $GME short

  • @TheBigonner

    @TheBigonner

    3 жыл бұрын

    same

  • @abisek.e7636

    @abisek.e7636

    3 жыл бұрын

    Same here

  • @itsGuy
    @itsGuy3 жыл бұрын

    I bought a stock that was going up, the moment I bought it, it has been going down for 2 weeks straight.. lol.. if I owned funeral homes, humans would become immortal

  • @abdirahmann

    @abdirahmann

    3 жыл бұрын

    Am dead🤣🤣🤣🤣💀💀💀💀!

  • @sachinjoshi3780

    @sachinjoshi3780

    3 жыл бұрын

    Same bro! If you ever want to buy some stock tell me first to buy some so it will fall crazy in it's history and you can buy it cheap

  • @wondernexus3d482

    @wondernexus3d482

    3 жыл бұрын

    DO IT

  • @vinaybhat7670

    @vinaybhat7670

    3 жыл бұрын

    Hahaha🤣 i can feel ur pain bro😄

  • @drcola143

    @drcola143

    3 жыл бұрын

    Yes that’s cause you probably bought a stock when it was significantly going up. So you probably bought a stock right before a sell off which isnt good

  • @idkdrew
    @idkdrew3 жыл бұрын

    “Theoretically” WSB: HOLD MY BEER 🦍🚀🦍🚀🦍🚀

  • @savvyrb
    @savvyrb3 жыл бұрын

    Finally I understand how a short works! Great job keeping it simple. Thanks you so much!

  • @chasepetty2038
    @chasepetty20383 жыл бұрын

    Who’s watching this after GameStop stock blew up

  • @mikemaroyi7756

    @mikemaroyi7756

    3 жыл бұрын

    ☝🏽

  • @jory500

    @jory500

    3 жыл бұрын

    And amc

  • @jonathannelson103

    @jonathannelson103

    3 жыл бұрын

    Occupy wall street, by taking their money and moving into their offices.

  • @TheBigonner

    @TheBigonner

    3 жыл бұрын

    im here

  • @lepton27

    @lepton27

    3 жыл бұрын

    This guy

  • @reallauradee
    @reallauradee4 жыл бұрын

    I'm lost. I need to watch this 10 more times.

  • @vegitoblue4390

    @vegitoblue4390

    4 жыл бұрын

    lol, I knew some of it before watching this video so I wasn't as lost. The fact that if many start to buy in can surge the stock, got me doubting to ever short again. =/

  • @deegegaming7911

    @deegegaming7911

    3 жыл бұрын

    I know I finally got it this time: Take a stock worth 1k Sell it for £1000 Make some maintanence fees to the guy your borrowing from - £50 It's dropped to £700 Buy it back at £700 and give it back to the guys managing that portfolio Keep your £300

  • @vegitoblue4390

    @vegitoblue4390

    3 жыл бұрын

    DEEGE GAMING u missed the 50 bucks of the fees on your total lol

  • @kyh6767

    @kyh6767

    3 жыл бұрын

    1:00~2:35 is the crux

  • @theexplorer3523

    @theexplorer3523

    3 жыл бұрын

    Don't even bother, there is much more to gain from going long. Why risk money when you don't need to. Just be patient. Buy great stocks now that are beaten down by the pandemic, hold and then sell on the positive news of a promised vaccine. There are many of them out there.

  • @KEVINtulo
    @KEVINtulo2 жыл бұрын

    Best explanation I’ve seen on KZread yet and I’ve watched a log of videos. This is by far the easiest way to understand shorting.

  • @billl3936
    @billl39363 жыл бұрын

    One of the best explanations of short selling that I have seen on KZread. I think I’ll stick with long positions and sleep better at night. Thank you plain bagel!

  • @akira666420
    @akira6664203 жыл бұрын

    Came here to understand whats going on with Gamestop's stock. LOL

  • @HUNTER-ox2of

    @HUNTER-ox2of

    3 жыл бұрын

    Did you understand

  • @kennethschefer7007

    @kennethschefer7007

    3 жыл бұрын

    @@HUNTER-ox2of Oh, I understand 🖐💎☝

  • @AverageAlien

    @AverageAlien

    3 жыл бұрын

    original

  • @jackspickphone6656

    @jackspickphone6656

    3 жыл бұрын

    Me too lol

  • @adamhausmann3969

    @adamhausmann3969

    3 жыл бұрын

    Still don’t get it

  • @MarkVrankovich
    @MarkVrankovich5 жыл бұрын

    After a few years my shorts are usually too worn out to sell. I just chuck them in the bin.

  • @crystal.holmes

    @crystal.holmes

    4 жыл бұрын

    Nice. Your kids must love you lol

  • @ritsan9794
    @ritsan97943 жыл бұрын

    You sir is such a awesome guy! Just discovered this channel and subscribed right away. Your videos never get boring even in a second.

  • @Lithilic
    @Lithilic Жыл бұрын

    This explained it really well. I always had a hard time understanding the leveraged position part but this cleared it up for me.

  • @jaketisdale
    @jaketisdale3 жыл бұрын

    Who's here during the GME short squeeze?

  • @joeymayson8279
    @joeymayson82794 жыл бұрын

    Short sellers: ‘exist’ Tesla stock: it’s free real estate

  • @shalow123

    @shalow123

    4 жыл бұрын

    @JOhn Doe You could say his account was...short lived after taking that position.

  • @ethanhiggins4887

    @ethanhiggins4887

    4 жыл бұрын

    my options sure did age well though

  • @JushBJJ

    @JushBJJ

    4 жыл бұрын

    @Art Of Illusions it will go back up eventually. We just have to sleep for a week or a month maybe.

  • @LindaMcification

    @LindaMcification

    4 жыл бұрын

    @Art Of Illusions And now it is going up

  • @LindaMcification

    @LindaMcification

    4 жыл бұрын

    @Art Of Illusions and then it will go up. :)

  • @rooroo3199
    @rooroo31992 жыл бұрын

    Perfect explanation. So many videos out there telling you how to press buttons on a computer, rather than explaining the whole process in its essence.

  • @obrianpalmer2036
    @obrianpalmer20363 жыл бұрын

    The Hedge funds that are shorting AMC needs to watch this... I don't think they understand the trouble they're in🦍🚀

  • @sreddi83

    @sreddi83

    2 жыл бұрын

    R u still holding?

  • @giese74
    @giese745 жыл бұрын

    One of the better videos I have watched regarding shorting stocks.....it still surprises me how many people have not watched The Big Short. Keep up the great content!

  • @fitrianhidayat

    @fitrianhidayat

    4 жыл бұрын

    I've watched it, I knew they had big risks, I didn't know it was that big

  • @stevewaclo167
    @stevewaclo1674 жыл бұрын

    In late 2019, those who shorted Tesla are crying the blues...

  • @jerry3790

    @jerry3790

    4 жыл бұрын

    I’ll have you know someone recently became a millionaire from shorting Tesla. He was a billionaire before.

  • @sarasara-kf8zi

    @sarasara-kf8zi

    4 жыл бұрын

    @@jerry3790 lol

  • @MichealMunro

    @MichealMunro

    4 жыл бұрын

    i hope hope all the investors who short tesla go bankrupt, that'll be a sight to see.

  • @zomyaalt6565

    @zomyaalt6565

    4 жыл бұрын

    i dont know man you just need to know how to pull out ( ͡° ͜ʖ ͡°)

  • @owenb8636

    @owenb8636

    4 жыл бұрын

    Elon Musk must be so happy. I read how much he hated those short sellers

  • @df56gh4d5h
    @df56gh4d5h3 жыл бұрын

    I have heard this explained many times but couldn't understand it. But after watching this video I finally understand short selling. Thank you!

  • @MikeLikeThat
    @MikeLikeThat3 жыл бұрын

    Great video! Just subscribed. Great explanations, great pace and examples. Keep em coming!

  • @NotoriouslyBadGamer
    @NotoriouslyBadGamer3 жыл бұрын

    GME is why I am looking this video up.

  • @dankenlightenment8903

    @dankenlightenment8903

    3 жыл бұрын

    Thanks for letting us know

  • @NotoriouslyBadGamer

    @NotoriouslyBadGamer

    3 жыл бұрын

    @@dankenlightenment8903 you have also helped me explain what a Short Sell is. You have been very helpful.

  • @AverageAlien

    @AverageAlien

    3 жыл бұрын

    recommended is why I am here

  • @jay-lm4we

    @jay-lm4we

    2 жыл бұрын

    I'm guessing you're sitting pretty on AMC at the moment 😉👍

  • @NotoriouslyBadGamer

    @NotoriouslyBadGamer

    2 жыл бұрын

    @@jay-lm4we Hell ya, I only have 42 shares, but some is better than none.

  • @EricSmyth4Christ
    @EricSmyth4Christ5 жыл бұрын

    I have been requesting this video for so long and you DID NOT DISSAPOINT!! Thank you so much!!! 😄😊😄

  • @jeeeeeeeee2977
    @jeeeeeeeee29772 жыл бұрын

    The dividend pay-forward being characterised initially as a cost would confuse people. The reason you pay out a dividend to the stock lender is because your short position value increases 1:1 with the required dividend payout. Thus it isn't a cost but merely a value exchange (they get the dividend from you but you get a higher value short position as the stock decreases)

  • @atanumalo6706
    @atanumalo67063 жыл бұрын

    1.5 million views clearly deserved as much subscriptions thanks pal, your work is crafty

  • @I_like_big_bombs
    @I_like_big_bombs4 жыл бұрын

    Essentially this is the best dad joke ever, that is if the dad is an investor. Son: HEY DAD I TOOK MY COMPANY PUBLIC! Dad: That is wonderful, put me down for $25,000 Son: Wonderful! I'm so glad you have so much confidence in me! Dad: Short Stocks Son: ....

  • @khaipinaulak485

    @khaipinaulak485

    4 жыл бұрын

    your first statement trun it down

  • @TerribleTonyShow

    @TerribleTonyShow

    4 жыл бұрын

    I thought we was gonna do euthanasia

  • @dinsel9691

    @dinsel9691

    4 жыл бұрын

    OMG THIS IS THE BEST DAD JOKE EVER... IF YOUR DAD IS AN INVESTOR AND YOU ARE A 10 YEAR OLD WHO HAS NOT EVER HEARD A DECENT JOKE BEFORE

  • @millysanchez7137

    @millysanchez7137

    3 жыл бұрын

    Lol

  • @I_like_big_bombs

    @I_like_big_bombs

    3 жыл бұрын

    @@dinsel9691 I tried, stepped on a land mine and exploded. Give me credit for taking the step tho.

  • @matthieu168
    @matthieu1684 жыл бұрын

    This channel is one of the best in its kind. I just spent months going through a lot of videos to have a better understanding of finance, and your videos are clear, relatively short without being too short, and give great explanations about diverse subjects. Thank you for this great content, hope you'll keep making those.

  • @hakabaka2048
    @hakabaka20483 жыл бұрын

    0:48 "meaning you could lose an infinite amount of money... theoretically" r/wallstreetbets : A theory is invalid unless it is proven.

  • @MrMattumbo

    @MrMattumbo

    3 жыл бұрын

    Science bitch! btw I like the stock!

  • @thoyo
    @thoyo3 жыл бұрын

    Best explanation I've seen. Simple and to the point.

  • @ChrisInvests
    @ChrisInvests5 жыл бұрын

    Shorting stocks can be lucrative but it offers limited profit with unlimited losses 🤷‍♂️

  • @_Digitalguy

    @_Digitalguy

    5 жыл бұрын

    Unlimited only if you want them to be unlimited... That is if you continually replenish your marging account, otherwise your broker will close your position well before you can lose more that what you invested

  • @pezpeculiar9557

    @pezpeculiar9557

    4 жыл бұрын

    This is if it is not shorting Sears stock!

  • @sylviarohge4204

    @sylviarohge4204

    4 жыл бұрын

    It would also be interesting to know how high the productivity of these stock traders would be if they were doing value-added work. It seems to me that the only difference between unemployed and stock traders is that stock traders are not paid by the state (unemployment benefit) but at the expense of companies and their workers.

  • @Lion_lamb

    @Lion_lamb

    4 жыл бұрын

    Stop loss

  • @youngduli
    @youngduli3 жыл бұрын

    Watching this after G$ME and $AMC is going crazy 🚀🚀🚀🚀

  • @rhastaswizbong
    @rhastaswizbong3 жыл бұрын

    Watching this on 2021 because I wanted to learn shorting in crypto. Very informative and understandable video. Thank you so much.

  • @hollandaise8390
    @hollandaise83903 жыл бұрын

    Short, straight to the point, clear and precise. Very nice video.

  • @wifluv
    @wifluv3 жыл бұрын

    I think Melvin at Citron forgot to watch this video before shorting GME.

  • @parker469a

    @parker469a

    3 жыл бұрын

    They have an algorithm to decide what company's to short and they were just mindlessly following that module. Bad idea especially if you have a podcast/newsletter that tells rando's exactly what you are currently shorting.

  • @Garthritis
    @Garthritis3 жыл бұрын

    I can't help to think that "investing" is more of a game people play to make or lose money, than it is a way to invest in ideas (corporations).

  • @Yo-rf9li

    @Yo-rf9li

    3 жыл бұрын

    That is exactly what it is, you just listed the definition. I don’t know where you got the idea of investing in ideas. It has always been a game. 😂

  • @chuckbizzert9098

    @chuckbizzert9098

    3 жыл бұрын

    Your thinking of venture capital. Venture capitalists invest in ideas.

  • @Garthritis

    @Garthritis

    3 жыл бұрын

    @@chuckbizzert9098 I went to public school lol! No, I guess I mean it in a broader sense. Like in the ' market place of ideas'. As an institution really is the rationalization of an idea or idea's. And through the stock market one can invest in that. Though I get how it's not really treated or viewed like that.

  • @ErikPT

    @ErikPT

    2 жыл бұрын

    No that's short and futures and options. Actual investing is fundamentally different to this trading (venture capital is investing in ideas). However, valuation is essentially 'guessing' how the company will perform

  • @Grubiantoll

    @Grubiantoll

    Жыл бұрын

    it is the fastest way to gamble away infinite amount of money

  • @liamlyall178
    @liamlyall178 Жыл бұрын

    Great video man, I get a lot of value out of these, keep them coming, much love.

  • @bar1350
    @bar13503 жыл бұрын

    Great video. I've had a few people explain short selling to me and still couldn't understand it --- until now. Maybe it's the teacher. I'm certainly not going to blame myself!

  • @Gamefox0
    @Gamefox05 жыл бұрын

    Great information as always, I never quite understood the process of going short until now. If I may make a request for a future video that I struggle to find simplistic information on, the methodologies of calculating the value of a company and hence its stock price. In order to work out what would be an ideal price to look for when attempting the paradoxically impossible task of buying low.

  • @anotherguy5038

    @anotherguy5038

    9 ай бұрын

    John 15:10

  • @passiveliabilities
    @passiveliabilities4 жыл бұрын

    That moment when you thought you had enough of nonsense content, and decide to take the situation in your hands and make a better content so everyone can understand your language, then stumble over this channel and be like...oh ok...maybe is a bit too late, someone made it already. Great content keep the hard work.

  • @ProjectSkrillexNL
    @ProjectSkrillexNL3 жыл бұрын

    Instant like and subscribe. Thank you very much. I knew how it worked but for some reason I always had struggle explaining it. You definitelly helped me on that one

  • @karenmccafferty5528
    @karenmccafferty55282 жыл бұрын

    I FINALLY understand it. Thank you for a clear, unrushed explanation.

  • @thehitmanhart09
    @thehitmanhart094 жыл бұрын

    I was confused for an hour about short long positions and the security ownership.. You cleared my doubts completely in this video. Very comprehensive video ! Way to go !!!!

  • @VincentDelmino
    @VincentDelmino3 жыл бұрын

    Who’s here after $GME?

  • @johnmacera3325

    @johnmacera3325

    3 жыл бұрын

    Lol, that’s exactly why I’m here. Then I started to scroll through the comments looking for anybody else 😂

  • @bensilver28

    @bensilver28

    3 жыл бұрын

    BB 🌈🐻

  • @100AcreWoodz1

    @100AcreWoodz1

    3 жыл бұрын

    Its amazing what 2 million degenerate autists are capable of

  • @CloBareMoneyCoach
    @CloBareMoneyCoach2 жыл бұрын

    Great video! Love all your graphics and sound effects! I'm definitely a visual learner and loved learning more about this through your video!

  • @jessicawiley1394

    @jessicawiley1394

    2 жыл бұрын

    Sorry for writing you, just out of curiosity your page come up on my suggested friend lists so I was just wondering if I knew you from somewhere???

  • @titansilva24
    @titansilva242 жыл бұрын

    Thank you for this video it is very helpful!! I am an amateur still so I will watch this video over and over until I get it fully 🙏🏼

  • @lightworkval
    @lightworkval3 жыл бұрын

    The youtube algorithm brings us together once again. After GME has started to short squeeze, this video popped up in my recommended feed lol

  • @BosonCollider
    @BosonCollider4 жыл бұрын

    The main thing this video sadly does not cover is shorting bonds, which is much, much, much more common than shorting stock due to their capped upside and is basically one of the most important things that banks do to lend money to companies while capping their risk (for example, shorting company A's bonds, to lend money to company B that has company A as their only customer, and pocketing the difference in yield). Similarly, the AAA-ranked mortgage-backed securities in the big short were bond-like securities that normally have very little volatility, have capped upside, are easy to borrow for shorting, any only had a few % yield over T bonds so that shorting them would only cost you a couple % of your investment each year at low risk, but had a huge payoff in the event of a default.

  • @gamesguy

    @gamesguy

    5 ай бұрын

    Technically there are stocks with uncapped upside. One thing he didn't cover is reverse splits. Many companies constantly dilute themselves into oblivion(for example biotechs) to fund operations and reverse split to keep the share price above exchange minimums. The gain on this is uncapped. It also applies to leveraged inverse ETFs like FNGD where if you had shorted it in 2018 you'd have made like 1000x your money.

  • @bad_boy8269
    @bad_boy82692 жыл бұрын

    Excellent video. Better than what else I've seen so far.

  • @soufiane634
    @soufiane6342 жыл бұрын

    Thank You ! The best and simplest explanation there is .

  • @fancypants5782
    @fancypants57823 жыл бұрын

    We all know why we're here

  • @grizzlypug8520

    @grizzlypug8520

    Жыл бұрын

    We're still here

  • @beaviswealth
    @beaviswealth5 жыл бұрын

    Nice video, Rich!

  • @meiyokechan1396
    @meiyokechan13963 жыл бұрын

    thank you for making long and short very clear. although i do not invest in stocks AND SHARES i am interested in learning more about such complicated investment tools and strategies.

  • @MasterCraftFishing51
    @MasterCraftFishing5110 ай бұрын

    For a new person just starting out in the world of crypto . This video really is done well keeping it simple and the explanation is easy to understand . Thank you very much !!!!!

  • @brandonlee934
    @brandonlee9344 жыл бұрын

    Short the short sellers, DOUBLE INFINITE MONEY!!

  • @ferussf2073

    @ferussf2073

    4 жыл бұрын

    Brandon Lee that’s what caused the 2008 financial crisis

  • @Mustafa2892

    @Mustafa2892

    4 жыл бұрын

    The IQ level of these guys is too damn high

  • @josephmassaro
    @josephmassaro4 жыл бұрын

    Simple definition: Shorting = Gambling...with Mob money.

  • @1notgilty

    @1notgilty

    3 жыл бұрын

    The "MOB" now works on Wall Street and wears tailor-made $1,000+ suits.

  • @nemeanlioness

    @nemeanlioness

    3 жыл бұрын

    @@1notgilty more profit when its legal

  • @1notgilty

    @1notgilty

    3 жыл бұрын

    ​@@nemeanlioness Right. If you lose with the Wall Street mob today they don't break your legs. They just take everything you own and everything you will ever own and then get a tax deduction for their other ill-gotten gains that is paid for by the rest of us suckers. It's much more profitable than the mob ever dreamed and it's completely legal.

  • @MrArtVein

    @MrArtVein

    3 жыл бұрын

    @@1notgilty not if you trade under a corporation. Just file bankruptcy keep it moving

  • @circularsky

    @circularsky

    3 жыл бұрын

    Congrats, you just described capitalism, the system which threatens our very existence. 👍

  • @tunod-
    @tunod-3 жыл бұрын

    Well this was briefly explained and it's honestly as simple as it gets. At least theoritical that is. Basically longs for upwards movement, shorts for downwards movement. And with the market almost always going up it takes a damn long time to start seeing huge digits whereas shorts could do it in half the time or even less. Only thing is long time investing almost ensures wealth, short is gambling all or nothing.

  • @AndyRhodes1
    @AndyRhodes1Ай бұрын

    This was a very helpful video. Thanks for including so much detail!

  • @NickPeitsch
    @NickPeitsch5 жыл бұрын

    The fact that your losses are unlimited inhibits me from short selling. I like the potential of unlimited gains better 😊

  • @fitrianhidayat

    @fitrianhidayat

    4 жыл бұрын

    Made you realized how crazy those guys in "the big Short" were...

  • @ASidd1

    @ASidd1

    4 жыл бұрын

    @@fitrianhidayat They all walked away richer though. They'd all done their research and knew that the defaults were inevitable. They had to settle for less, however, because the Banks didn't have the liquidity to pay their bets - a little ironic.

  • @skyliner0064

    @skyliner0064

    4 жыл бұрын

    However, how often do.you see the theory play out?

  • @ninabeasley2674

    @ninabeasley2674

    3 жыл бұрын

    Right?

  • @thegilmourfan
    @thegilmourfan3 жыл бұрын

    Who is here after the GME short squeeze?

  • @rilohoneu6030
    @rilohoneu60303 жыл бұрын

    thank you this is the most comprehensive lesson in learning that I understand nothing about economics

  • @sunuwaaa167
    @sunuwaaa1673 жыл бұрын

    Thanks for this video. It really helped me understand this method much easier

  • @brandonlongmire8642
    @brandonlongmire86425 жыл бұрын

    Great movie! I read the book first, and then saw the movie. The book is like 10xs better because it’s more explanatory.

  • @bobbyboljaar7513
    @bobbyboljaar75135 жыл бұрын

    Margot Robbie explained it better i think, but this guy is waaaaay hotter.

  • @correctionguy7632

    @correctionguy7632

    4 жыл бұрын

    dude thats gay

  • @JohnDoe-xf7rm

    @JohnDoe-xf7rm

    4 жыл бұрын

    Dude looks like Conan O Brien

  • @SirFaceFone

    @SirFaceFone

    4 жыл бұрын

    we are all gay on this blessed day

  • @flashdetonate

    @flashdetonate

    4 жыл бұрын

    nice swap brah

  • @Lucas-pu9qv

    @Lucas-pu9qv

    4 жыл бұрын

    Kinda gay not gonna lie bro

  • @Matthew-kg8nl
    @Matthew-kg8nl3 жыл бұрын

    “You can lose an infinite amount of money” UNLESS you are well-connected, THEN you can get purchases of the stock frozen, forcing the stock price down and scaring those who bought into selling at lower and lower value.

  • @katz7476

    @katz7476

    3 жыл бұрын

    hi, im new to this, can you explain that ?

  • @regidus

    @regidus

    3 жыл бұрын

    @@katz7476 unless you live under a rock your just trollin right now lol

  • @wallywild5088

    @wallywild5088

    3 жыл бұрын

    @@katz7476 its what happened with gme

  • @nickalvarez2962

    @nickalvarez2962

    3 жыл бұрын

    @@regidus not everyone knows about stocks, before you knew what was going on u we’re just like that guy.

  • @regidus

    @regidus

    3 жыл бұрын

    @@nickalvarez2962 yeah your right. I just meant this has been all over the news thats all

  • @brunoluan2149
    @brunoluan21493 жыл бұрын

    Conan O'Brien's son knows how to give an explanation. Thanks, man 👍

  • @simonchau8675
    @simonchau86755 жыл бұрын

    Thanks been interested in this for a while now

  • @nachannachle2706
    @nachannachle27065 жыл бұрын

    Great explanation. I love the detailed perspectives and the examples given. :) My observations have been that short-sellers are always on the edge of things: any announcement/news might send them in a "panic" move. Often, in margin trading, the house is always the winner because it not only collects fees and interest payments, but it can also liquidate your position through collusion with other (bigger) investors at any time. All in all, short selling is a strategy that works only for a certain amount of time, mostly to get money/liquidity quickly. Going long and diversifying do offer more sustainable ways to grow your capital.

  • @wildhogget69
    @wildhogget693 жыл бұрын

    Now that was simple and to the point, thank you.

  • @z06realtor32
    @z06realtor323 жыл бұрын

    Awesome video! I think this would be a good one for everyone to watch as of the last 30 days!

  • @Generictingz95
    @Generictingz953 жыл бұрын

    very informative! i also love the way bill ackman once described it. its like borrowing coins from friend that you believe will lose value. you "borrow" your friends coins and sell them for $1000. then the coins prices go down to $500 so you buy the coins back for $500 netting you a profit of $500. then you give your friend back his coins and he has his same coins back you you made a profit. may have to give your friend some interest for "borrowing" his coins ;D

  • @krystal2445
    @krystal24454 жыл бұрын

    wow definitely something new i learned today. here’s my like to you!

  • @franklynspanklyn3885
    @franklynspanklyn38853 жыл бұрын

    Wow this is simple and easy to understand! Awesome video thanks!

  • @kozlav
    @kozlav3 жыл бұрын

    Internet: "How shorting works??" Reddit: "It doesn't 😂" #GameStonks

  • @parker469a

    @parker469a

    3 жыл бұрын

    @RNIK Sorry to burst you bubble but a bunch of other hedgefunds are also helping the Redditors but even more people have started shorting it so both sides are going to get slaughtered. The daily cost of shorting it is up to %50 now and it's normally only 1%, that's how many people are still trying to short this stock.

  • @curtisjohnson2433

    @curtisjohnson2433

    3 жыл бұрын

    @@parker469a Well, the redditors are actually the ones winning. Whether they make money or lose money it doesn't matter to them. It's not about making $, its about bankrupting and shutting down major hedge firms. By doing what they're doing, they've essentially transferred wealth from the Elites to everyday people by nearly 100 billion dollars. I don't like socialism and the transfer of wealth by government, but THIS?? Oh, I can get behind this. Matter a fact already have! GME all the way! never pulling it out! MAKE THEM SQUEEL!!!!!!!!!!!!!!!!!!!!

  • @parker469a

    @parker469a

    3 жыл бұрын

    @@curtisjohnson2433 Most hedgefunds are mostly older people's 401k retirement funds and the only people who will win on this in the end is other hedgefunds. Well and anybody who bought in at 10 and dumps at 340 a share. I don't actually expect to convince you of that though so good luck.

  • @curtisjohnson2433

    @curtisjohnson2433

    3 жыл бұрын

    @@parker469a Gotta suck to be a boomer xDD

  • @parker469a

    @parker469a

    3 жыл бұрын

    @@curtisjohnson2433 GME lost 100 dollars a share today so let's see how long it stays even that high.

  • @joshuaronisjr
    @joshuaronisjr3 жыл бұрын

    Who else is here trying to figure out how the heck their teenage neighbors are making 💸💎💸 on Gamestop?

  • @adnanshahriar4435

    @adnanshahriar4435

    3 жыл бұрын

    The real question is, how do they understand this stuff?

  • @D0nnyy

    @D0nnyy

    3 жыл бұрын

    @@adnanshahriar4435 it's really simple once you study it

  • @Redvines69
    @Redvines694 жыл бұрын

    I have never understood how this became a thing. It feels like there should have been someone way back when who told people to f off when someone said they wanted to sell stock they don't own.

  • @guppy0112

    @guppy0112

    4 жыл бұрын

    Like when people sell property they don't own? You know, like their houses? When people sell products/services they don't own (which is most people, ie they haven't paid for them yet, but will pay later when then sell them).

  • @MrArtVein

    @MrArtVein

    3 жыл бұрын

    This isn't anything but dropshopping a speculative price. As the other poster said when people sell their homes that aren't all the way paid off, they don't own it the back does.

  • @shadowblade2149
    @shadowblade2149 Жыл бұрын

    I like how perfectly this video is placed. June 2019, providing an example that the market will crash over the next two years and look where we are

  • @StreaminFreedom
    @StreaminFreedom3 жыл бұрын

    Best concise clear explanation on short sales!

  • @daved602
    @daved6024 жыл бұрын

    Something interesting to note is that you can short financial assets without the associated costs using derivatives such as CFDs. This also comes at a large amount of risk however, as CFDs utilise large amounts of leverage. The 'stop loss' feature comes with gap risk. There are also Put Options in which you can only lose the premium you pay initially.

  • @ThePapaja1996

    @ThePapaja1996

    Жыл бұрын

    CFD is illegal in usa

  • @markbaker4425

    @markbaker4425

    6 ай бұрын

    Cfd are considered gambling in the uk. I dont think its an intelligent position

  • @joker927
    @joker9273 жыл бұрын

    This is very useful today. You forgot the part where wall street investors lose all their money but get bailed out by the government.

  • @4music2power0
    @4music2power02 жыл бұрын

    I just finished The Big Short. It's got me more intrigued than ever on how our economy/society works. I remember when 2008 happened. But I was too young to understand it as I was just entering my adulthood. Nearly 14 years later after learning about everything else that's fucked up in the world, that movie was the Cherry on top. Like Vinnett said. ...

  • @oneopinion5231
    @oneopinion52312 жыл бұрын

    Great vid. Never had it explained so well. Now I know what a short squeeze is. Thnx

  • @shimeih2287
    @shimeih22873 жыл бұрын

    I'm baffled by the amount of stuff my economics degree never taught me🤦🏾‍♂️

  • @marekjaworski5965
    @marekjaworski59654 жыл бұрын

    I didnt understand short selling and after this episode I finally subscribed!

  • @bmck9097
    @bmck90973 жыл бұрын

    very, very well explained. Thank you.

  • @nickn753
    @nickn7533 жыл бұрын

    Very clear explanation, thank you for this video 👍

  • @dennisdawson9896
    @dennisdawson98963 жыл бұрын

    This has been one of the best explanations I heard. Still I don’t feel sorry for the losers. This the price of playing the game!

  • @Rohith_E
    @Rohith_E3 жыл бұрын

    Thank you. The situation with GME short sellers losing $1.3 billion makes sense now

  • @SlyElliot

    @SlyElliot

    3 жыл бұрын

    So did the short sellers lose because wallstreet bets bought tons of stock and caused a surge which fucked over the actual short sellers because they have to pay their margins back?

  • @grahamtaylor3580
    @grahamtaylor35807 ай бұрын

    Brilliant explanation, thanks. Will be checking out your other stuff.

  • @mskafridi4815
    @mskafridi48152 жыл бұрын

    An eye opener indeed, Thanks for making a simple video

  • @paulf1461
    @paulf14614 жыл бұрын

    Now the movie trading places makes so much more sense.

  • @targusmacintosh7506
    @targusmacintosh75063 жыл бұрын

    Long story short: Hedgies have to buy my AMC shares at minimum of $1000 each. Thanks for whatever you did Friday afternoon! ;)

  • @sreddi83

    @sreddi83

    2 жыл бұрын

    Did AMC squeeze?

  • @billyjones589
    @billyjones5893 жыл бұрын

    This video really helped me understand what shorting is.