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How did you make money on a stock that lost value?
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It's called "Shorting" a stock. Do a google search for "Stock Shorting" and "Triple Witching" and you will get all the info you need. Also known as options trading..A great way to lose your ass big time. But as you can see, also a good way to make some cash with minimal investment.
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"Shorting" is [red]NOT[/red] the same as "options trading".
In shorting, you "borrow" stock from someone else, promising to "return" it later -- and then you "sell" it. You have a negative balance of, say, -100 shares of stock, and cash handed over to you for the sale of, say, $1500 ($15 per share). Next month, the stock has dropped to $2 per share, so you buy 100 shares to "return" to the guy you "borrowed" the original 100 from, paying out $200 to get them, and you have netted $1300.
In options trading, you purchase the right to buy (or sell) shares at a fixed price for some defined period in the future. For example, you pay some guy $1.55 per share for the right to force him to sell you his 100 Microsoft shares at $75 per share, up through the third Friday in February 2002. (Options contracts expire on the third Friday of any given month, for some stupid reason.) If the stock stays around $67, you lose the $155. If the stock goes to $80, you just made out bigtime. For options traded on American stocks, these options can be exercised at any time during the period, or you can just buy or sell the options themselves to someone else. For European options, the exercise date is the one date that you specify, although you can sell the options to others during the intermediate period.
In options trading, you have a limited risk -- at the very most, you can lose the $155 you put into the options. In shorting, you can go bankrupt if the stock takes off. KKD (Krispy Kreme Donuts) destroyed a lot of people who shorted it just after it IPO'ed; it became a bigger fad than these people expected, the stock went up, and they were bankrupted, which forced them to buy the stock to "cover" their short position, which caused the price to go up further, which bankrupted other people who had shorted, which forced them to buy to cover, which pushed the price up further, which. . . .