1. Short selling (short selling)

Short selling is also called short selling. It is an investment term and an operating mode of financial assets. As opposed to going long, shorting is to first borrow the underlying asset, then sell it to obtain cash. After a period of time, the cash is spent to buy the underlying asset and return it.

Common functions of short selling include speculation, financing and hedging. Speculation refers to the expectation that the market will fall in the future, selling high and buying low to obtain profits from the price difference. Financing is taking a short position in the bond market and paying it back in the future, which can be used as a way to borrow money. Hedging means that when the asset risk in the hands of a trader is high, he can reduce his risk exposure by shorting risky assets.

2. Short buying

Short buying is also called long trading. Traders use borrowed funds to buy futures in the market, hoping to sell them at a high price when the price rises in the future. Profit from speculation, the symmetry of short selling.

In the modern securities market, buying and selling transactions are generally conducted using margin accounts. When a trader believes that the price of a certain stock has an upward trend, he borrows funds from a securities company through a margin account to purchase stock futures. Later, when the stock price rose to a certain level, he sold it to the market at a high price and obtained the money.

Extended information?

Short selling is usually an operation when predicting that the market will fall. When the security price is high, it borrows securities from brokers and then sells them. When the security price is low, it sells them. Then the securities are bought back from the market and returned to the brokerage, earning the price difference. However, if the market price rises instead of falling, more money will be spent to repurchase the securities to be returned, resulting in losses.

Naked short selling is an investment technique in which investors directly sell non-existent securities on the market without borrowing securities, and then buy back the securities to obtain profits when the market price drops further. A trader who performs a naked short sale simply purchases the security before the delivery date for the trade to be successful. Naked short selling is illegal in most markets.

Baidu Encyclopedia-Short

Baidu Encyclopedia-Short