Can someone explain shorts to me?

>what happens when it goes back up you fuckin idiot?

Thats not how shorting works.

Person A owns 10000 shares of ABC stock ($10/share)

I want to short.

I borrow 1000 shares from person A and sell them on the open market for $10,000. I now have $10,000 and owe person A 1000 shares of company ABC.

Tomorrow company ABC is only worth $5/share.

I have $10,000 and a debt to give person A back 1000 shares. I go to the open market and buy 1000 shares for $5000 and return the borrowed shares to person A.

Now I have $5,000 profit and no debt of shares to person A

Not how it works otherwise Person A wouldn't benefit from the deal in anyway

Also the answer to your dumb puzzle is 'dog'.

you posted this yesterday too

Posted what?

Bumperino

they profit when you get liquidated fuck tard

...

Cheryl gets the D.

I think the Idea is that Person A believes the opposite - that the price of the share will rise. Also assuming there is a transaction fee to start the short if Person A is correct they will now have their original share back as well as interest gained from the transaction fee?

Just remembered they loaner also pays interest on the share until they return it. So person A can make quite a bit if they are right about the asset continuing to grow.

Person A profits from interest on loaning out his BTC.

It's cat.

I don't think so because Bernard says NOW, he wouldn't need to wait until Albert says he knows.

>be me
>long and short btc at the same time
>never lose money

???
profit

It could be cat or dog.
The first guy has a unique letter, which excludes the last option (tag).
The second guy now knows "tag" is not the word and he knows the answer. So his letter only appears 2 times (its either "t" or "g", cant be "a" cause it appears 3 times).
So the first guy has either "c" or "o" (the 2 unique letters in cat and dog) and the last person has "a" or "d".

So it could be either dog or cat, or am i missing something?

>there are people dumber than me

This puzzle SUCKS, it does not have a conclusive answer.
is right, it could be either cat or dog.
The website linked earlier misses something in his analysis (something that eliminates "has").

Pic related (solution)

Thought this too. First name begins with a, second with b, third with c. Dim is the only world to follow the alphabet sequentially like abc. Guess we're wrong, though.

"Jack" usually isnt just a random guy. Its an exchange. If "jack" lends a bitcoin to john at 10k and john shorts it and the price goes up to 15k , john will be forced to put 5k of his money to buy back the bitcoin, which will pump it even more

Google "short squeeze"

>mfw im dumber than you and op together

This is kinda incorrect. Selling high and buying low doesnt give you more money, only gives you more crypto, so he wouldnt have made 5k if it went down to 5k.

He would only make profit once the price recovered

thanks, feel better after going through the work. why would the author emphasize NOW otherwise.

So let's say I short 1000 shares of ABC at $10 each. The next day, ABC goes up to $100/share.
Doesn't that mean that I now need to spend $100,000 to give back the loaned shares? That would put me in $90,000 debt, 9x the initial investment.

Nevermind, forgot you were talking about lending/borrowing.

If you don't set a stop-loss, yes.

the lender often charges a small fee to lend

Yes. If you short at 10 and it pumps to 100 you get fucked by a factor of 9.