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Yes, exactly. Ideally (for the short-sellers) the stock would fall even further, as if the stock is at the exact level it was when they bought, then they'll onl
by fnbr 10y ago
Yes, exactly. Ideally (for the short-sellers) the stock would fall even further, as if the stock is at the exact level it was when they bought, then they'll only break even.
- laichzeit0 10y agoIt would have to fall more than that to make up the interest they're paying on the shares they borrowed as well as brokerage fees.
- fnbr 10y agoWith current interest rates, it wouldn't have to fall much more, but yes. Plus opportunity cost, and a return to compensate for the risk [1], etc. [1] It's very risky to short a stock as you can end up losing a very large amount of money, as stocks can increase many times in value. When holding a stock, your risk is finite, as it can only lose 100% of it's value. When shorting, the stock can double or triple in price.
- kgwgk 10y ago> With current interest rates, Borrowing costs for TSLA stock have been over 20% annualized (I don't know the current situation).
- jon_richards 10y agoThey won't quite break even because of fees and margin interest charges.