Quote:
Originally Posted by SkinnyPupp
Nope I have no idea actually
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Shorting works like this and works for any asset really...
I borrow a GPU from you, I immediately sell it for $1000
When I feel like prices have bottomed out at $500, I buy it back and return the GPU back to you. I just made $500 off that transaction.
If the GPU increases in price to $1500 and I decide to cover the short, I'll have to buy back the GPU for $1500, I give you the GPU and I lost $500...
Of course, because I borrowed the GPU from you, I'll be paying interest to you until I return the GPU.
I used a GPU as the asset since this is a Bitcoin thread... But yeah, you can make money on falling asset prices...