Short Position
Selling an asset with the expectation that its price will fall, allowing you to buy it back cheaper.
Definition
Going short means selling an asset you don't own, expecting its price to decrease. You profit when price falls and lose when it rises. In forex, going short EUR/USD means selling euros and buying dollars.
How It Works
- Borrow and sell at current price
- Wait for price to fall
- Buy back at lower price
- Return borrowed asset, keep the difference
Trading Tips
1
Potential loss is unlimited (price can rise indefinitely)
2
Used to profit from declining markets
3
Stop loss above entry to limit upside risk
Related Terms
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