Short Selling
Short selling is a trading strategy used by investors to make money from the decline in the price of a security. It involves selling a security that the investor does not own, and then buying it back at a lower price to make a profit. Short selling is a risky strategy, as the investor must be able to predict the direction of the security’s price accurately in order to make a profit.
History of Short Selling
Short selling has been around for centuries, with the earliest recorded instance occurring in 1710. The practice was initially used by merchants to hedge against price fluctuations in the commodities they were trading. In the modern era, short selling has become a popular trading strategy for investors looking to make money from the decline in the price of a security.
Comparison of Short Selling Strategies
| Strategy | Risk | Reward |
|---|---|---|
| Long Position | Low | Low |
| Short Position | High | High |
Summary
Short selling is a trading strategy used by investors to make money from the decline in the price of a security. It involves selling a security that the investor does not own, and then buying it back at a lower price to make a profit. Short selling is a risky strategy, as the investor must be able to predict the direction of the security’s price accurately in order to make a profit. For more information on short selling, investors can visit websites such as Investopedia, The Balance, and Yahoo Finance.
See Also
- Long Position
- Margin Trading
- Options Trading
- Day Trading
- Swing Trading
- Scalping
- Hedging
- Arbitrage
- Technical Analysis
- Fundamental Analysis
