Short Selling
What is Short Selling?
Selling borrowed shares in the hope of buying them back later at a lower price.
Understanding Short Selling
A short seller borrows shares, sells them, and later buys them back to return to the lender. If the price falls, the short seller profits from the difference; if it rises, they lose.
Because a price can rise without limit, potential losses on a short position are unlimited. Short sellers also pay borrowing fees and must cover any dividends.