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Investing & the Stock Market vocabulary · Orders & Trading

Short selling

Meaning in investing & the stock market, with examples

/ˌʃɔːrt ˈselɪŋ/nounCommon term

In investing & the stock market, short selling means: Selling borrowed shares in the hope of buying them back later at a lower price and returning them, so that the seller profits from a fall in price.

In Turkish: açığa satış, short işlem

How it is used

Used by hedge funds and active traders. You short a stock, go short or take a short position; later you cover the short by buying back. Regulators can restrict or temporarily ban short selling during market stress. Losses can be unlimited because a price can keep rising.

Example sentences

  1. The regulator temporarily banned short selling on bank shares after the sharp drop.

  2. Short selling is risky because there is no limit to how high a price can go.

Common collocations

  • short selling ban
  • short a stock
  • go short
  • cover a short position
  • short seller
  • long positionThe situation of owning a security because you expect its price to rise. You gain if the price goes up and lose if it falls.
  • bearishExpecting prices to fall, or showing signs that prices will fall. It can describe an investor, a forecast, a chart pattern or the mood of the market.
  • margin tradingBuying securities with money partly borrowed from a broker, using the investments in the account as security for the loan.
  • hedgeTo reduce the risk of losing money on an investment or business exposure by taking an opposite position, often with derivatives such as futures or options.

More terms: Orders & Trading

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This page explains English vocabulary for learners. It is not financial advice.