Short selling involves betting against the stock.
Process of Short Selling
- the trader borrows a number of shares from a third party
- the trader sells them immediately for cash
- when the security dips, the debt is repaid by repurchasing the same amount of shares of the borrowed security at the lower price
- traders nets the profit from the negative price differential
If the person shorting
short squeeze
“what happened to GameStock”
A short squeeze is a situation in which a bunch of people try to drive the price of the up by buying enough shares such that the short sellers are forced to sell high—driving up the price.