Short selling is an investment or trading strategy that speculates on the decline in a stock or other securities’ price. It involves borrowing shares of stock from a broker and selling them at current market prices, then later buying them back at a lower price. Short sellers profit from the difference if the price drops; however, they face potentially unlimited losses if the price rises instead. This strategy requires careful consideration due to its risks and complexity.
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About the author
Jenna Lofton, MBA is a stock trading and investment expert with over a decade of experience in the financial industry. She began her career as a financial advisor on Wall Street and now helps everyday investors make smarter financial decisions through StockHitter.com.
Her insights simplify complex financial topics into actionable strategies for beginners and seasoned traders alike.