Many of you believe that the only way to make money in the stock market is to buy a stock that you expect to go up in value and sell it when does go up. But there are several ways to profit from the decline in the price of a stock. There are put options you can buy, call options you could sell, or perhaps the easiest way to profit from a falling stock is to sell it short.
Apple replaces Tesla as the U.S. company with the largest valuation of shares sold short
There are risks, of course. Selling short requires the investor to borrow shares from his brokerage firm and sell them without actually owning the stock. The goal is to buy back the shares at a lower price than the amount received when you borrowed the stock and sold it. Once you buy back the stock, the shares you borrowed are replaced and the transaction is over.
Apple lost 10% one day in early 2019 and turned out to be a perfect buying point for investors
If you are an Apple shareholder, don’t let this news panic you into making a bad move
One year later, the shares had more than doubled in value and after another year, they were up more than 3 and a half times since that 10% decline. So while there is more money bet on a decline of Apple than on any other U.S. traded company, those who own the stock shouldn’t panic. But you should be prepared. Professional short sellers aren’t part of the genteel side of retail investing that you often see in commercials.
Those who short stocks for a living hire publicists to send out exaggerated stories that would cause a company’s stock to plummet if they were true. So don’t be surprised to hear about weak iPhone 14 sales, more delays for the Mixed Reality headset, and other rumors that can’t be easily verified but can still put a dent in Apple’s stock price. This is the gang warfare part of the investing world and Apple now has ta bullseye painted on its back by these short sellers, seeking to profit from panic selling in the company’s stock due to real or made-up concerns.