Elon Musk Begs Tesla Staff Not to Sell Their Stocks

I think the important thing to note here is that there are multiple ways to bet against a stock:

1. If you have the stock, sell it.
2. If you don't have the stock:

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:

1. The difference between the price you purchased at, and the price you sold at.

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.

Edit: Short selling big dumb, but shorting is not what this big dumb was explaining, this big dumb wanting to explain betting against stock. Fixed