How Short Selling Works

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the big short is probably one of the

most popular films on the topic of

investing it's a star-studded movie that

follows the real story of three groups

of people who short or bet against the

housing market for billions of dollars

right before the 2008 real estate crisis

as you might expect our heroes end up

making quite a bit of money but how

exactly does a short work well in the

movie the positions are taken through

what are known as swaps a derivative

agreement that is taken with the banks

but for common investors short positions

typically involve individual stocks make

them easy enough to take but be warned

shorting comes with a lot of risks on

top of charging you expenses you don't

normally see with standard investing

shorting also offers a skewed payoff

where you face a limited upside in an