- cross-posted to:
- politics@lemmy.world
- cross-posted to:
- politics@lemmy.world
And many traders are betting that the stock price will continue to fall further.
Shares of Trump Media have erased all their gains since they began trading under the ticker DJT last month.
The stock closed down more than 8% Monday at $37.17 after falling about 11% earlier in the day. It had traded above $79 a share on March 26, the day of its debut.
But experts say it’s hard to draw any firm conclusions about what the stock price’s movement means. That’s because so many available shares — about 12%, one of the highest ratios of any active stock listing — reflect traders’ bets that the stock will fall, said Ihor Dusaniwsky, managing director at S3 Partners, a data and predictive analytics company.
This is called short-selling.
Welcome to the whacky world of derivatives, Squid. The Big Short movie explains shorting stock pretty well while also covering how the 2008 financial crisis happened. Pretty good movie imho.
I’m still very confused despite people doing their best to explain it to me. But I’m glad it sounds like Trump wouldn’t benefit.
I’ll try to explain it with less jargon. You go to a brokerage firm and say you want them to sell 100 shares of stock they own and give you that money as a loan. You agree to give them that same number of shares of stock back later at an agreed to date (usually within 90 days???). You hope that when you are required to give them back that stock it is cheaper for you to buy your own shares of it. They sell at $50/share and give you a loan for $5,000, but when you have to give their shares back to them they only cost you $25/share. You only had to spend $2500 to pay back a $5000 loan.