Rooting for Donald Trump to fail has rarely been this profitable.
Just ask a hardy band of mostly amateur Wall Street investors who have collectively made tens of millions of dollars over the past month by betting that the stock price of his social media business — Truth Social — will keep dropping despite massive buying by Trump loyalists and wild swings that often mirror the candidate’s latest polls, court trials and outbursts on Truth Social itself.
Several of these investors interviewed by The Associated Press say their bearish gambles using “put” options and other trading tools are driven less by their personal feelings about the former president (most don’t like him) than their faith in the woeful underlying financials of a company that made less money last year than the average Wendy’s hamburger franchise.
I’ve dabbled in stocks and made some good/some bad choices (with a small amount of “play” money I was comfortable with losing if it all went to shit), but some of these gambling investment strategies, I just don’t understand how you’re even supposed to initiate them and I’m guessing I’d get into more trouble than it’d be worth.
Shorting a stock is riskier than most bets, because theoretically there is no limit to your loss. In practice, we’ve discovered that during a short squeeze, institutional investors can suspend trading and manipulate prices by kiting fake transactions. Of course, if you or I tried to skip out on covering our shorts, we’d probably go to prison.
You’re confusing two different types of shorts.
https://www.nerdwallet.com/article/investing/call-vs-put