Short Selling

Short Selling

The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short.

Notes:

Selling short is the opposite of going long. That is, short sellers make money if the stock goes down in price.

This is an advanced trading strategy with many unique risks and pitfalls. Novice investors are advised to avoid short sales.

See also: Bear, Bear Raid, Bull Market, Buy Back, Buy To Cover, Days to Cover, Naked Shorting, Short, Short Covering, Short Interest, Short Interest Ratio, Short Interest Theory, Short Sale Rule, Short Squeeze, Tick Test Rules, Zero Plus Tick

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Short selling

Establishing a market position by selling a security one does not own in anticipation of the price of that security falling.