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What is a short sell?

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Anonymous

15y ago
Updated: 8/16/2019

A short sell is when you sell borrowed assets with the plan to buy those same assets back at a later date. This usually occurs by borrowing a security from a broker, then buying it back later.

You do this when you think that the asset will soon decrease in value, so that you are selling high and buying low.

However, if instead the asset goes up in value, you will suffer a loss, since you will buy the asset at a higher price than you sold it for,

Note that there may be fees for borrowing the assets, and there may be payment of dividends paid on the borrowed assets.

The opposite of a short sell (or "going short") is the normal practice of "going long", which is buying the asset and selling it later, with the hopes that the assets value will rise.

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Wiki User

15y ago

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