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/biz/ - Business & Finance

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19679155 No.19679155 [Reply] [Original]

If you sell short in a stock of a company going bankrupt
So lets say its rn at 20USD, in a year its at 0.2USD,
So inversely leveraged
that would mean I make 100x profit if I find a seller at 0.2USD, right?

>> No.19679168

no, you would make $19.80 per share. with an initial investment of $20, you don't even 2x

>> No.19679178
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19679178

>>19679155
You mean if you find a buyer. You would make 99% profit. Most you can make shorting is 100%. (20-0.2)/20 = rate of return.

>> No.19679196

>>19679178
And that's why leverage exists.