One strategy to capitalize on a downward-trending stock is selling short. This is the process of selling “borrowed” stock at the current price, then closing the deal by purchasing the stock at a future time./GettyImages-136494649-d1659ebab70e4bf89ae4127c8dcbb0d3.jpg)
Short selling is an investment strategy that profits when a stock's price goes down. Learn more about the risks and potential benefits of shorting a stock.
What is short selling? Short selling a stock is when a trader borrows shares from a broker and immediately sells them, expecting the price to fall shortly after.
What Is Shorting a Stock? A trader shorts a stock when they think its price will fall. Shorting involves borrowing the stock from a brokerage, selling it, and then buying it when the price is lower than when they sold.