Sell high, buy low: Short Selling on Robinhood (making money when stocks drop)

This will be quick. Since many first-time investors use Robinhood as their online broker, they must know that they do NOT have the ability to short-sell stocks (short selling is the practice of making money when stocks fall in value). Because stocks appear to be hitting new highs each week, eventually prices have to take a pause and head back down. How does one make money on Robinhood with the expectation that stocks will go down?

SH

SOXS

SH and SOXS are two ETF’s (exchange traded funds) that go up when stocks go down. SH is primarily geared to go against the direction of the broader S&P index. So when the S&P goes down, SH goes up…. and vice verse. SOXS is an ETF that goes against the trend of technology sector stocks of the S&P. When you hear news that stocks like Apple, Amazon, Google, or Intel are going down, SOXS goes up.

Therefore, with stocks at current high levels, perhaps it’s a good time to look into putting in some money in ETF’s like SOXS and SH to make money when stocks go down.

Questions? Let’s hear them. And as always, feel free to reach out about how you can be invested to make money on both directions of the market.

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