Shorts
Shorts are a financial term used to describe a situation in which an investor has sold a security that they do not own. This is done in anticipation of the security’s price falling, so that the investor can buy it back at a lower price and make a profit. Shorts are also known as short selling or shorting.
History of Shorts
The practice of short selling has been around for centuries, with the earliest recorded instance being in the 17th century. It was used by merchants to speculate on the price of commodities such as wheat and corn. In the 19th century, the practice was adopted by stockbrokers and investors, and it has since become a popular way to make money in the stock market.
Comparison Table
| Long Position | Short Position |
|---|---|
| Buy a security | Sell a security |
| Profit when price rises | Profit when price falls |
| Unlimited profit potential | Limited profit potential |
| Unlimited risk potential | Limited risk potential |
Summary
Shorts are a financial term used to describe a situation in which an investor has sold a security that they do not own. This is done in anticipation of the security’s price falling, so that the investor can buy it back at a lower price and make a profit. Shorts are also known as short selling or shorting. For more information about this term, you can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Long Position
- Short Selling
- Margin Trading
- Bear Market
- Bull Market
- Options Trading
- Day Trading
- Swing Trading
- Scalping
- Arbitrage
