Casino Royale and Shorting Stocks

I just watched Casino Royale today. Yes, yes, I know it was shown in the movies long ago, but since my gym provides free DVDs, I made full use of the service. James Bond foiled a major terrorist act against the unveiling of a new airline model, quite similar to the unveiling of the Airbus 380 recently. The reason for the terrorist act? So that when the stocks of that fictitious company crash, the person who had shorted the stocks would make huge gains.

In the movie, the terrorist betted US$100 million, and the broker said that he was going against the market. Hence, there is this shady side to buying stocks. There are some people who plot against companies, and they stand to make huge financial gains when they succeed. According to the movie, airline stocks crashed, and there were people who made huge financial gains from shorting the market. Since this is a movie, we should take this with a pinch of stock. For the normal everyday investors like us who are not privy to such knowledge, we are at the losing end.

As someone told me, trading can be a dirty game. Of course, there are safeguards, but to small time investors, it is tough against companies with huge money. If we are looking at penny stocks, the usual trading volume can be quite low. If a fund company decides to buy that stock, it will increase the trading volume tremendously, and the price will increase. At the same time, if this company decides to sell, then the price of the penny stock will fall.

But seriously, could this be a new form of terrorism? Terrorists may target certain institutions or companies, and when they make the money from such means, they can use it to further their cause. There is money to be made from bull markets and bear markets. That’s something to think about.