There are many reasons individual investors may choose to short sell stocks. For example, an investor could sell a share of AAPL at $140, then buy it back after the price dropped to $130, leaving them with $10 in profit per share. In a short sale, the investor profits when the stock price falls. A short position is when an investor sells (to open) a stock they do not own in hopes they can buy it back (to close) at a lower price in the future. The second way to make money in the stock market, which new investors may be less familiar with, is when an investor opens up a short position. For example, if an investor purchased a long position in Apple at a current price of $140, they’re hoping the share price goes to $150, leaving them with $10 in profit per share. In other words, they hope the price of the stock goes up. A long position is when an investor buys (to open) a stock at a lower price than they intend to sell it (to close). The first, and more traditional, is by opening up a long position. In the stock market, there are 2 basic ways to make money. Please note – this article is intended for educational purposes only and is not formal investment advice.
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