The first time I watched the Oliver Stone movie Wall Street 2, I was confused about something: Josh Brolin’s company, Churchill Schwartz, makes a ton of money when the company that Shia LaBeouf works for, Kellar Zabel (KZI), starts to dramatically fall in stock price. Contrary to conventional investing, how is it that someone gets “rich” from stock prices going down? How Shorting a Stock Works: Although there were a lot of factors at play in the movie, the basic answer to this question is that Schwartz was “shorting” the Kellar Zabel stock. What does that mean? Let’s look at a simple example: … [Read more...] about What is Shorting a Stock?