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How does muddy water make money by shorting?
Brokers have a business called securities lending, which is to lend you some stocks. This is the core point.

If Muddy Waters wants to short a company, it is necessary to investigate the unfavorable factors of the company first, and then borrow the company's stock from the brokerage firm to sell it.

Then, Muddy Waters will release an investigation report on this company. The core meaning is to tell investors who invest in this stock that the stock of this company is far from the current price. Sell it and run for your life!

So the stock price fell, and at a certain time, Muddy Water bought the stock and then returned it to the broker.

If you sell at 10 yuan and buy at 5 yuan, it is equal to earning 5 yuan gross profit per share, which is the net profit after deducting transaction costs, interest paid to brokers and possible income tax.