So you’ve decided to short a stock.
Go for the ones you’ve been hearing bad things about.
From the company’s perspective, being shorted isn’t great. They generally don’t want to appear less than desirable.
Once you’ve selected a company to short, you ask a broker to lend you shares of the underperforming stock.
Over the course of the loan, you better hope everyone continues to hate on your stock, driving the share value down.
Because at some point you’ll have to close on your short and buy your shares back.
If the share value has gone up, you’ll have to buy back your investment at a higher price…
In addition to having to pay the lender any dividends or rights over the course of the deal.