Let's just assume that there are 100 shares of GameStop (worldwide) and go from there. Let's assume that the price per share/stock before all of this was $100 (in a "good" economy, etc.). How would this all work?

A nice timeline, step by step, line by line would be nice. For ex:

  1. Stock is selling at $100 per share (100 shares total). June 20XX

  2. Economy starts tanking, stock now at $95 per share. August 20XX

  3. People start predicting that it will go down further, thus they start "betting" (insert definitions that are accessible and not jargony), etc.

^ something like that would be nice. Thanks!

  • Spike [none/use name]
    ·
    4 years ago

    This is the simplest way I’ve found to explain it.

    • You borrow a friends tv with the plan to give it back to them in a year
    • since TVs go down in price over time you see an opportunity for profit by selling the tv now, say for $1000
    • A year passes and the cost of the tv has dropped so you buy the tv for $900
    • you give the tv back to your friend while pocketing the $100 profit

    That’s essentially the basics of shorting a stock