If you know Stock is about to Crash, how to you Make Money off of it?

October 30, 2009 by admin
Filed under: Make Money Online Fast 

I was watching House and there’s this billionaire who’s about to sell all his assets.
House says he did a a ,000 ’short-sale’ on it.

How the hell do you make money by knowing a stock is going to CRASH.
I realize that if it’s about to skyrocket and you know before-hand you can just buy low then sell high, but how do you make money off stock that’s about to crash?

Thanks,
Steve.

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3 Comments on If you know Stock is about to Crash, how to you Make Money off of it?

  1. SmartA$$ on Fri, 30th Oct 2009 3:23 am

    2. If you want to bet on a stock going down in value, then you do what’s called a "short sale" or "selling short"

    Basically, you sell stock before you own it. You basically sell a contract that says you’re going to pay someone a certian number of shares of the stock at some point in the future.

    So if the stock is $100/ share today, and you short sale 20 shares of it to someone, they would pay you $2,000 (today’s market price). You then have the obligation to actually give them stock by the date in the contract. Obviously, you’ll have to buy 20 shares of that stock in order to fulfill that contract, so if it becomes cheaper to buy the stock, then you’ve made money. For example if the stock price dropped to $50/share, you could buy 20 shares for $1,000 to fulfill the contract, and you’d have made $1,000 on the transaction.

    PLEASE understand that this is VERY risky business. If the stock price starts going up, you can get screwed. There’s no limit to how high a stock price can go, so there’s no limit to how much money you could lose.

  2. jj on Fri, 30th Oct 2009 3:23 am

    3. Short sell, options and many others. Those are the two most basic.

  3. Since you ask. on Fri, 30th Oct 2009 3:23 am

    4. You could either short the stock or you could buy the Exchange Traded Fund (ETF) with the symbol SDS…

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