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Short selling

• Short selling is the selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short selling is a legitimate trading strategy. Short sellers assume the risk that they will be able to buy the stock at a more favorable price than the price at which they sold short.

• Is the act by which a speculator or risk manager sells an instrument at a high price with the intent of purchasing it lower. This is particularly the case for the speculator. The risk manager would generally be selling short against a specific or global exposure. There are technical differences in selling short on the futures and securities markets. Also, the purchase of puts or other derivative strategies can serve as a substitute for being short. There are different rules which apply to short sellers on securities markets. The key differences are between market makers and market participants.

• Establishing a market position by selling a security one does not own in anticipation of the price of that security falling.

 
 

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 Embedded terms in definition
 Anticipation
Buy
Delivery
Derivative
Futures
High price
Market maker
Market
Position
Purchase
Risk
Sale
Securities
Security
Selling short
Short
Speculator
Stock
Trading
Will
 
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