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DOCS: Document shorts in terms of actual finance terms (#1908)
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@@ -14,11 +14,24 @@ So these concepts below should seem similar, but won't be exactly the same.
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## Positions: Long vs Short
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First off, note that _all_ transactions have a flat commission fee, so
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high-frequency trading is not a good strategy.
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When making a transaction on the stock market, there are two types of positions: Long and Short.
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A Long position is the typical scenario where you buy a stock and earn a profit if the price of that stock increases.
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Meanwhile, a Short position is the exact opposite.
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In a Short position, you purchase shares of a stock and earn a profit if the price of that stock decreases.
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This is also called 'shorting' a stock.
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In a Short position, you borrow shares of a stock to sell and earn a profit if the price of that stock decreases.
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This is also called 'shorting' a stock. The proceeds from the sale are held as
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collateral, called 'margin'. You also have to add additional margin equal to
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the current value of the stock - this is the cost to 'purchase' the short.
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When you close a short position, you buy back the shares to pay back the securities loan.
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You then get the margin back, minus whatever was used to repurchase the shares.
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So, your profit is still the change in price times the number of shares.
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Beware that, unlike Long positions which have unlimited upside and limited
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downside, shorts have limited upside and unlimited downside, and selling a
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sufficiently underwater short can cause your money to go negative.
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Shorting stocks is not available immediately, and must be unlocked later in the game.
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