Short Selling
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.
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