Quiz: How Much Do You Know About Short Selling?
Even if you don’t follow the stock market compulsively, you might have heard about short selling.
Short selling is a controversial practice that, if done well, allows investors to make a lot of money–and we mean a lot–by making some calculated bets about a stock’s performance.
Because it involves betting on the fact that a stock will drop in price, the practice has major implications for market stability, and it has the possibility of throwing a market into greater flux than it had been experiencing previously. And, as we all know, economic stability is something we could all use a little more of these days.
(Find out if greater economic instability is going to become the norm in our lifetimes.)
Well, short selling is back in the headlines again, as regulators in Europe reevaluate their opinions on the practice. To test your own knowledge of this investing strategy, take our fun true/false quiz below on short selling. Then, read our basic primer on short selling to catch up on the aspects of the practice that you didn’t know.