Selling short is a trading strategy that takes advantage of an anticipated drop in a stock's price. To' Sell short', you borrow shares from your broker, sell them, and keep the proceeds until the stock price drops. If it does, you then buy back the shares at a lower price, return the borrowed shares to your broker (plus interest and commission), and pocket the difference. Suppose, for example, you sell short 100 shares of stock priced at $10 a share. When the price drops, you buy 100 shares at $7. 50 a share, give them back to your broker, and keep the $2. 50-per-share profit (minus commission). Of course, if the share price rises instead of falls, you may have to buy back the shares at a higher price and suffer the loss.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). sell short. Retrieved September 23, 2026, from http://smartdefine.org/sell_short/definitions/1163220 |
| Chicago | Barry Goldsmith. 2010. "sell short" http://smartdefine.org/sell_short/definitions/1163220 (accessed September 23, 2026). |
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