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Short Margin Accounts
There are short margin accounts as well – they function in much the same way. The difference, though, is that you’re betting that the stock will go down in price, rather than up. The concept is simple: you sell a stock that you don’t currently own, and if you’re right, you buy it back later at the lower price. The difference between the selling and repurchase prices is your profit (we ignore trading costs and taxes). Tiger asked, “How do you sell stock that you don’t...
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