Selling a security and then borrowing the security with the intent of replacing that security at a lower price than it was borrowed. The short trader is betting that the price of the security will go down.
To sell short, the buyer borrows shares he or she does not own from a broker. The buyer orders the shares to be sold and takes the money from the sale. Then the buyer waits for the stock price to fall. If the price does fall, the buyer buys the shares at the lower price, pays the broker's commission and any fees, and gains a profit. Selling short is risky; if the stock price increases, the buyer loses money.
The reverse of the usual stock market technique, short selling is based on the anticipation that a particular security price will go down. The practice of short selling involves borrowing shares of a security from your broker and immediately selling them at the current price. Then, as the price of that security declines, you buy back an equal number of shares on the open market and use them to cover the shares you borrowed from your broker, and make a profit. For instance, if you sell short 100 shares of XYZ Corporation at $50.00 a share and the price of the stock drops to $35.00, your profit is $15.00 a share, or $1500.00. Short sellers lose when the price of the stock ascends rather than descends. Theoretically, there is more risk involved with short selling because a stock price could continue to rise forever. A stock purchased at $10.00 a share can only fall to zero. A stock sold short at $10.00 could go to $20.00, $30.00, $40.00, etc.
Investors who sell shares they do not possess in the hope of buying them back at a lower price
In anticipation of falling stock prices of, say, IBM, a speculator borrows 1000 shares from a broker and sells them, with the understanding that in 90 days the borrowed shares will have to be repurchased and returned to the loaning broker. If, when the speculator buys them back the price of the shares has fallen by one-half, then a tidy profit will have been made. But what happens if the price of IBM keeps on going up
This is the process by which an investor sells a stock that they do not own. There is a hope of selling the stock and buying it at a future date at a lower price. The stock is borrowed from a broker and then must be paid back at a lower price than it was borrowed for.
If an investor think the price of a stock is going down, the investor could borrow the stock from a broker, sell it and then buy it back at a later date to repay the broker.
Selling Stock that is not owned by the holder. This stock is borrowed, and must eventually be paid back by the holder selling short. (SpeedTrade does not allow this.)
A situation where a currency has been sold with the intent of buying back the position at a lower price to make a profit.
A trade in which the investor (working through a broker) borrows a security, sells it, repurchases it at a later time, and then returns it to the party who initially loaned the security. If the price has fallen, the short seller profits. When the security is returned, the investor is said to have "covered the short position."
The practice of could borrowing a stock, future or option from a broker and selling it because the investor forecasts that the price of a stock is going down.
This is practice of selling shares that you do not own in the hope that the share price falls before you have to settle the contract. If the price does fall you can then buy the shares at the lower price and pocket the difference.
The practice of selling securities which are not at present owned, in the hope that they can be bought at a lower price, once the price has fallen to settle the contract.
See short sale and short sale against the box.
If an investor thinks the price of a stock is going down, the investor could borrow the stock from a broker and sell it. Eventually, s/he must buy the stock back on the open market. For instance, you borrow 1000 shares of XYZ on July 1 and sell it for $8 per share. Then, on Aug 1, you purchase 1000 shares of XYZ at $7 per share. You've made $1000 (less commissions and other fees) by selling short.
A strategy that makes money if a stock price drops. It is a normal trade executed in reverse order. Sell first at a high price. When the stock price drops, buy it back at a lower price and keep the difference.
Based on the belief that a particular security price will go down, the investor borrows a quantity of securities from a broker and immediately sells them at the current price. Then, when the price falls, the investor will buy the same number of securities back, thus making a profit because he/she bought at a lower price than he/she sold. It is the reverse of the usual stock market technique.
describes a situation when an investor borrows the stock from a brokerage firm, sells it at the current price (for example, $60 a share), then within a certain period of time buys enough to return what was borrowed to the brokerage firm (say, when the price has dropped to $50 a share), making a profit due to the fall in price
The sale of a security that the investor does not own in order to take advantage of an anticipated decline in the price of the security. In order to sell short, the investor must borrow the security from his broker in order to make delivery to the buyer. The short seller will eventually have to buy the security back, or buy to cover, in order to return it to the broker. Short selling Is regulated by Regulation T of the Federal Reserve Board. See: Close A Position; Covering Short; Delivery; Margin; Regulation T; Selling Short Against The Box; Short Covering; Short Interest; Short Interest Theory; Short Market Value; Short Position; Short Squeeze; Uptick Rule