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A bet by an investor that a stock will go down in price. The investor borrows
the stock from a broker, sells it, and eventually buys it back on the market to return the borrowed shares to the broker. If the stock declines in price between the time the investor sells the
shares and buys them back, a profit is realized.
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In other words you make money if the stock goes down in price. Short selling is an excellent way to make money, but remember a couple things:
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Most brokers require you to short sell a minimum of 100 shares of a stock typically over $4 or $5.
- In the long run stocks tend to rise.
And with a bull market it's even more difficult to make money.
- Only short sell stocks with a large float
to avoid the short squeeze.
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