Short (or Short Position)


What is a 'Short (or Short Position)'

1. The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.

2. In the context of options, it is the sale (also known as "writing") of an options contract.

Opposite of "long (or long position)."


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BREAKING DOWN 'Short (or Short Position)'

1. For example, an investor who borrows shares of stock from a broker and sells them on the open market is said to have a short position in the stock. The investor must eventually return the borrowed stock by buying it back from the open market. If the stock falls in price, the investor buys it for less than he or she sold it, thus making a profit.

2. For example, selling a call (or put) options contract to a buyer entitles the buyer the right, not the obligation to buy from (or sell to) you a specific commodity or asset for a specified amount at a specified date.

Learn more about this dynamic strategy - Read When To Short A Stock.

  1. Short Covering

    Buying back borrowed securities in order to close an open short ...
  2. Weak Shorts

    Traders or investors who hold a short position in a stock or ...
  3. Short Squeeze

    A situation in which a heavily shorted stock or commodity moves ...
  4. Long (or Long Position)

    1. The buying of a security such as a stock, commodity or currency, ...
  5. Short Interest

    The quantity of stock shares that investors have sold short but ...
  6. Sell To Close

    In options trading, an order to sell an option that you own and ...
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