Short selling
Also called: shorting, short sale, going short
Selling first and buying back later, aiming to profit from a fall in price.
A short position's gain is capped at the sale value, when the price falls to zero, while its loss grows as the price rises with no fixed limit. Short sellers also face margin calls, borrowing costs and the risk of a short squeeze.
Example
Shorting at ₹500 and buying back at ₹1,500 loses ₹1,000 a share, 200% of the sale value.
Learn more in these lessons
- Short sellingHow does short selling work, and why can its losses be unlimited?
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