I followed yesterday an interesting courses on Khan Academy on short selling. Here is the video. The main idea and meaning of short selling is :
When you think that the price of one share is going to decrease …
1. You rent a share through a broker. This broker has this share between it has plenty of clients and among them, there are clients who the very share on which you want to bet and to short sells.
2. You sell it immediately right away, before the price actually goes down.
3. You wait until the price is low
4. And then you cover your position buying this same share at a low price.
I have been trading through the online French bank “Boursorama” for a few months and I am currently wondering whether S.R.D. is the same thing as Short Sells. I may be the same principles but I am not sure enough.
And then you will enjoy below a video on the impact of short selling in stock markets in general. Are they making markets safer or not ?