This is how a short call, also known as shorting a stock, works in the stock market. It seems counter intuitive to make money by a stock dropping in price - but here’s how that goes. Lets say You own stock in SPACE and you have no intention of selling it for a long time - its stock price is $10 per share. I come to you and say “hey I would like to borrow 1 share of your SPACE stock… Ill pay you interest an agree to give you your stock back at a specified time.” So, you will temporarily lend me 1 share of SPACE stock, I will hang on to it for an agree upon amount of time and then give you back 1 share of this same stock back plus some money for your trouble. How do I make money by borrowing your stock share? Im betting that the price of your SPACE stock is going to fall. I borrow the stock from you for $10 and immediately sell it, now I have $10 dollars and no stock.. After the agreed upon amount of time has gone by, if my bet pays off - the stock price has dropped down to 5 bucks, so I go back to the stock market and buy 1 share back and I give it to you. I have now profited that $5 difference minus the interest I promised to pay, and you still have your 1 stock, nothing has changed for you plus you got the interest for doing nothing. #stockshort #stockmarket #explainer But if the stock goes up, Im in trouble. Because our agreement is basically a contract and I still have to give you that 1 share in the amount of time we agreed and if SPACE stock is now $15, then I have to go to the market and spend $15 to get a stock to pay you back plus the interest, and I will have lost $5. So youre betting on the stock price to drop and when it does you buy it back to make money. It doesn’t happen very often, but right now its 2021 and in the matter of a week, GME stock went from $15 to $400!! And there had been some big players making big short calls on that stock before it went up, and they are on the hook for that increase in price PER SHARE in some cases with thousands and thousands of shares on the line. Thats trouble. This has been a simplified explanation for how shorting a stock works. Im Nicholas Johnson; this is the Space Warehouse.