Selling borrowed shares to profit from a price decline.
You borrow shares from a broker, sell at current price, and aim to buy back later at a lower price (covering the short). Profit = sell price - buy back price. Risks: theoretically unlimited loss (stock can rise indefinitely), borrow fees, dividend payments owed to lender, and forced buy-ins if shares become hard to borrow.
Selling borrowed shares to profit from a price decline. You borrow shares from a broker, sell at current price, and aim to buy back later at a lower price (covering the short). Profit = sell price - buy back price. Risks: theoretically unlimited loss (stock can rise indefinitely), borrow fees, dividend payments owed to lender, and forced buy-ins if shares become hard to borrow.
In trading, Short Selling is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.
You borrow shares from a broker, sell at current price, and aim to buy back later at a lower price (covering the short). Profit = sell price - buy back price.
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