Ever since I was a kid my dreams have been crazy as hell. Last night, I had a dream where I was dropping my kid off at school, but there were people on both sides of the road standing waiting for a wedding. I see the couple and nope right out. Turning around a curb, suddenly I was in a fucking baseball stadium and rows of seats cut me off. I had to get home so I got out of my car? I'm walking down the stairs when I hear "oh, there it is!" I look up where the person was pointing to the sky. I see some rocket like thing, and assumed it was fireworks. It stopped, I hear three dreaded bomb falling noise, and then it slams into a seat a few rows down from the wedding. I hit the deck because I don't want to die. But instead of exploding it sprays enough glitter throughout the stadium I ended up with a mouth full. Then I get out of there, call my mom, explained what happened, head to their house which is now a bunker in new York City and they refuse to believe what I went through. Then I woke up.
I think the important knowledge here is that "shorting" means betting against a stock. There are numerous ways to do this.
A. Buy a "Put" contract at a lower strike price than the current price in the future. At any time between the contract purchase and the expiration date you can exercise it and take your winnings.
B. Short Sell on Margin. Don't do this. Essentially you borrow the stock, sell it right away, then buy it back to return at the lower price.
Maximum loss:
2A: The fee per contract. One "Put Option Contract" is 100 shares * the fee. Say the fee for your strike price is $9. Then you pay $900 for one contract. That is your max loss.
2B: Your margin cap. If you borrowed and sold a share for $245, but it turned around and went up, your loss can be arbitrarily large. Don't margin. It's stupid.