I have a confession to make. I’ve never shorted a stock or ETF in my life. That’s right, the guy who ran a few “long-short” mutual funds has never shorted anything. Or have I?
You see, shorting involves borrowing shares, and taking the risk that the stock or ETF could move against you. Infinitely. There’s no limit to how much you can lose. Whereas with buying a put option, if you are the buyer, you can only lose the capital you put up.
