Business and Personal Finance Dictionary
# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
- SHORTING STOCKS
Instead of purchasing shares of a stock you think is going up in price, you borrow shares, sell them immediately, wait for the price to go down, and then buy them at the lower price and return the shares to the broker. The advantage of shorting stocks is that you can make a profit without an initial cash investment. Shorting stocks is considered riskier than buying stocks because the price of the stock could rise, resulting in unlimited losses, as opposed to buying long, where your downside is limited to the amount you paid for the stock.Back