Going short, or short selling, is a strategy where a trader sells an asset they don’t own, anticipating a price decline. The trader borrows the asset from a broker and sells it on the market, aiming to repurchase it later at a lower price, returning it for a profit. This method is common in bearish markets or as a hedge. While potentially profitable, short selling carries significant risk since losses can be unlimited if prices rise. It also involves costs like interest or borrowing fees. Successful shorting demands market timing, strong analysis, and risk controls.
Example:
A trader borrows Shares and sells them, aiming to repurchase later at a lower price.
