Basics

Short Selling

By Ryan Silk & Lawrence Polatchek · Reviewed April 2026 · Options Trading Glossary

Selling borrowed shares to profit from decline

What is Short Selling?

Short Selling Selling borrowed shares with the expectation of buying them back at a lower price. Short selling carries unlimited risk since stock prices can rise indefinitely. Buying put options or using bear put spreads provides a defined-risk alternative to short selling.

Complete Definition

Selling borrowed shares with the expectation of buying them back at a lower price. Short selling carries unlimited risk since stock prices can rise indefinitely. Buying put options or using bear put spreads provides a defined-risk alternative to short selling.

Example

Instead of shorting 100 shares of AAPL (unlimited risk), you buy a put option for a defined-risk bearish bet.

Related Terms

Put Option Synthetic Stock Margin

Written by

ApexVol Research Team

Quantitative options research

All calculations use live ORATS institutional data — the same source used by professional volatility desks.

Technical reviewer

Ryan Silk, ApexVol Founder

Reviewed for technical accuracy

10+ years trading options. Built ApexVol's pricing engine, Greeks model, and IV-rank methodology.

This guide is updated as market conditions and ORATS data change. Last revised 2026-05-12. How we research →

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