The financial world we live in is just as wild, if not more, than the mountains and woods we walk through. We are told that the fundamentals of our economy are strong, but we can feel that something is wrong. My unique financial background and survival passion make Financial Survivalist and excellent place to learn and share.

Tuesday, February 21, 2012

How to Make Money from the Crash

9:47 AM  ,  1 comment

How To Tuesday
How To Make Money From the Crash

Millions of people lose millions of dollars when the stock market crashes. But a few make millions. How do they do it? The simple answer is called a short.

Sorting is essentially selling borrowed stock, hoping the price falls so that you can repay your borrowed stock for less.

For example, borrow from an institution Stock A, sell it immediately for $100. Then the price for Stock A falls to $75 and you buy it back. Then return the Stock A you borrowed from the institute. You make $25.

Actual shorting is a little bit more complicated and there are many ways to do it. In my opinion the easiest way to do it is through ETF's (exchange traded funds) that are designed to short the market. They trade just like a stock and increase in value when the underlying assets decreases.

Proshares has a good list of ETFs and a filter to sort out the ones that short the market. Next time the market crashes, maybe you'll be one of the few that make millions.

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1 comments:

  1. UnknownJanuary 20, 2014 at 1:55 AM

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