Short selling is an investment term such as stock futures: for example, when you expect a certain stock to fall in the future, you sell the stock you own when the current price is high, and then when the stock price falls to a certain level Buy at the right time, so the price difference is your profit. Short selling refers to the expectation that the market will fall in the future, selling the stock at the current price, and buying it after the market falls to profit from the price difference. Its characteristic is the trading behavior of selling first and then buying.

Short selling is a common operation method in the stock futures market. The operation is to anticipate that the stock futures market will have a downward trend. The operator sells the chips in hand at the market price and waits for the stock futures to fall before buying again and making a profit. Take the middle price difference. Short selling is the reverse operation of long selling. In theory, it means borrowing goods first, selling them, and then buying them back. Generally, the formal short-selling market has a third-party securities firm that provides a platform for borrowing goods. Generally speaking, it is similar to a credit transaction. This model can make a profit in the wave of falling prices, that is, first borrow goods at a high level, sell them, and then buy them back after the price drops. In this way, buying is still at a low level and selling is still at a high level, but the operating procedures are reversed.

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.

Reference: Short Selling-Baidu Encyclopedia