Short selling 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.

Short selling is a common operation mode in stock futures market. It is expected that the stock futures market will have a downward trend. The operator will sell his chips at the market price, and then buy them after the stock futures fall to earn the middle price difference.

Shorting is the opposite of doing long. Theoretically, it is to borrow goods to sell first and then buy them back. Generally, the regular short-selling market has a platform for third-party brokers to borrow goods. Generally speaking, it is similar to a credit transaction.

Extended data

Short selling is usually an operation to predict the market decline. When the price of securities is high, it borrows securities from brokers and sells them. When the price of securities is low, it repurchases securities from the market and returns them to brokers to earn the difference.

But if the market price rises instead of falling, it will cost more money to buy back the securities to be returned, resulting in losses. In the traditional stock market, investors will make profits when the market goes up, and short selling is a special way for investors to make profits when the market goes down.

If the market falls as expected, you can earn the difference when the price is low. If the market does not fall but rises, theoretically there is no upper limit for the price increase, and it will suffer heavy losses when covering, so it is risky and speculative. Because of its high speculation, not every stock exchange allows short selling; Even if allowed, there are often more restrictions.