
Shorting a stock is essentially betting that "this stock price will go down."
So if you borrow a stock worth 10,000 won and sell it, and then the stock price actually drops to 5,000 won, you buy it back and return it.
The profit comes from the fact that it's not so much that 'someone gives you money,' but rather it comes from the market. You initially sold it for 10,000 won and secured cash, and later when you buy it back for 5,000 won to return it, you keep the difference of 5,000 won. This is the profit made from shorting.
In simple terms, while the stock price is falling, that difference becomes your profit, and that money isn't specifically 'given' by someone, but rather arises from the results of market transactions.
Let's break it down more intuitively. Shorting is like borrowing an item from a friend, selling it, and then buying it back when it's cheaper to return it.
For example, if you borrow an item worth 10,000 won from a friend and sell it for 10,000 won in the market, but later the price drops to 5,000 won, you can buy it back for 5,000 won and return it to your friend. Then, if you subtract the cost of buying it back for 5,000 won from the money you initially made by selling it for 10,000 won, you have 5,000 won left. This is the profit generated through shorting.
Shorting has been around for quite some time and has been utilized in the financial markets in the form of short selling for a long time.
In particular, derivatives are derived from this, where futures and options are contracts made in advance regarding the future price of an underlying asset.
Shorting is also a type of derivative thinking, and these derivatives are used in various ways for hedging risks or for speculation.
Ultimately, the profit gained from shorting is based on the prediction that 'the price will fall,' leaving that difference, and derivatives can be seen as making these various financial transactions more complex and diverse.








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