Some good answers already but I'll add this despite some overlap: Likely a lot more approaches than I can think of are available to an entity with hundreds of

Some good answers already but I'll add this despite some overlap: Likely a lot more approaches than I can think of are available to an entity with hundreds of millions of dollars with which to place a bet. I don't know the specific marketplace and id's when you start to get into products like credit-default swaps, but in general the derivative market allows two parties with opposing views of the future to bet against each other. Suffice to say that you would create a position with a "short" effect for yourself on the soon-to-be-declining securities: through buying puts (pay now, get cash at expiration if the security's price drops), selling calls (get cash now, bear risk of the security price going up until expiration), shorting a security ("borrow" it now and plan to buy it back at a lower price later if you win, or a higher price if you lose) or sell a put + buy a call (same risk as shorting only no need to borrow the security and lower cost than simply buying a put, and more upside than selling a call). The difference between institutions and mortals like us is that they are allowed to carry relatively massive positions compared to their capital, presumably because they are supposed to know what they're doing. So a player with $100M could probably take a $2B short position because of the leverage he's allowed, say 20:1 (probably conservative - I've heard of firms reaching 100:1). The effect is that a 5% move in the right direction doubles that $100M, and a 5% move in the wrong direction wipes out the player. At least in theory said player's PhD quants in the "risk management" department minimize the daily volatility of the net effect of all of the bets placed by different specialists within the organization by placing still more bets. We've all seen stories of traders taking positions though that somehow didn't get flagged or adequately hedged by risk management. Aside from the rare rogue trader, this obviously doesn't always work and companies "blow up" by accruing a loss larger than their capital. (unless say they're selected to be "bailed out" with extra capital) A "blow up" can cascade because of counter-party risk, meaning that firms on the other side of these trades won't get paid. That's why we had AIG get massively bailed out. Due to SEC regulations however, we mortals are limited to about 2:1 leverage (or 4:1 intraday) for securities. Options and futures can effect a higher ratio though. If a retail investor gets squeezed, he must immediately deposit more cash or the brokerage will liquidate it for him involuntarily. If he still owes, it becomes a debt like any other.