by PenultimateManStanding » Tue 22 Jan 2008, 22:42:58
$this->bbcode_second_pass_quote('Tyler_JC', 'I') shorted the market big time with my UpDown fantasy stock market account.
I've lost more than 5% in one day.

This is something that puzzles me.
$this->bbcode_second_pass_quote('wiki', 'I')n finance, short selling or "shorting" is the practice of selling financial securities the seller does not then own, in the hope of repurchasing them later at a lower price. This is done in an attempt to profit from an expected decline in price of a security, such as a stock or a bond, in contrast to the ordinary investment practice, where an investor "goes long," purchasing a security in the hope the price will rise.
So if the market goes down, it seems one would profit. Can anyone explain this to me? If you sell the market short, it would seem then that any fall, even a little one, should net you a profit at the end of the day. I don't know a whole lot more about this stuff than I learned in that old Dan Akroyd movie
. (great flick, btw). Maybe what I'm missing is that you offer to sell at a price lower than the current prices in expectation that the price will fall even more than that. Then, when the prices fall below your selling price you buy to cover your position and make a profit. If this is right, then it seems one could have made a bundle today by selling short right at the start today and then cashing out, say, 40 minutes later.