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.
Become a Fan! Follow Me on Twitter
Tuesday, February 21, 2012
DISCLAIMER!!!!!!!!!!!!!! Financial Survivalist MAKES NO CLAIMS WHATSOEVER REGARDING PAST OR FUTURE PERFORMANCE of investments. ALL EXAMPLES, DIAGRAMS, DISCUSSIONS, LESSONS, OR RECOMMENDATIONS ARE FOR EDUCATIONAL OR ENTERTAINMENT PURPOSES ONLY. THIS BLOG DOES NOT AND IS NOT INTENDED TO PROVIDE FINANCIAL ADVICE OF ANY KIND. ANY COMMENTARY USED ON THIS PAGE IS FOR PURPOSES OF DISCUSSION ONLY. PLEASE SEEK PROFESSIONAL ADVICE BEFORE YOU TO BUY OR SELL SECURITIES AND YOU SHOULD NOT CONSTRUE ANYTHING ON THIS PAGE AS LEGAL, TAX, INVESTMENT, FINANCIAL OR ANY OTHER TYPE OF ADVICE. PROFESSIONAL ADVISE should be sought before entering any dangerous environment. Do not attempt any act described or discussed on this website.