Interest Rate Swap

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Socialist Democracy VS Democratic Socialism

Socialist Democracy as the name suggests has Democracy as the Noun with Socialism as the Adjective sprinkled on it. It’s when the society tries to accomplish certain socialist ideas like socialized health care and education while still being a democracy at heart.

While a Democratic Socialism is where all the socialist ideas including no private property of means of production are honored…

Short Selling

Imagine for a moment that a friend of yours collects rare coins. And you have the view that those coins are gonna go down in value. So, the way you would short those coins Is you call up your friend and say, “can I borrow a few of your coins?” And he says, “sure.” And you borrow the coins, You then sell them for the $1,000 each That they sell for in the market at the time, And then you wait for them to drop in value, And you turned out to be right and the coins dropped in value to $500. You go back into the market, you buy them back for $500. You’ve sold them for $1,000, you’ve repurchased them for $500, You’ve made $500 on each coin, And then you return the coins to your friend. Your friend is in the same place he was when he started And he has the same coins that he started with. You might have to actually pay him something for borrowing the coins, ’cause he loaned them to you, so you might pay him an interest rate. So he’s happy because he’s made interest lending you the coins, You’ve made money profiting from the decline of the value of the coins, And that’s short selling. That’s when it works. But if you sell it at a high price and it goes higher, And it can go infinitely higher, Because the stock can go infinitely higher, Then you’re on the hook for that. So, this is why it takes big cojones to short stocks.