Short selling, also known as "long-term trading", is a speculative activity in which traders use borrowed funds to buy futures in the market in order to sell them at a high price in the future when prices rise, and it is also the symmetry of short selling.

Short selling refers to short selling, which is an investment term and a way of operating financial assets. Contrary to bulls, bears borrow the underlying assets first, then sell them to get cash. After a period of time, they spend cash to buy the underlying assets and return them. The common functions of shorting are speculation, financing and hedging.

2, the process is different

Short-selling means that investors predict that the stock price will rise, but their own funds are limited, so they can't buy a lot of stocks. Therefore, they pay a part of the deposit first, buy stocks through bank financing through brokers, and then sell them when the stock price rises to a certain price, so as to obtain the difference income.

Short selling means that investors predict that the stock price will fall, so they pay mortgage loans to brokers and borrow shares to sell first. When the stock price falls to a certain price, buy the stock, and then return the borrowed stock to get the difference income.

3. Different characteristics

Most of the funds needed for short sellers to buy stocks are lent by securities companies, which is different from ordinary commodity trading. The whole process of trading more can only be completed by buying stocks first and then selling them. Shorting is conducive to improving market liquidity and promoting price discovery. Shorting is conducive to balancing unilateral transactions and correcting overvaluation.

References:

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