RE: ??14 Jun 2024 14:15
Quite simply AWL .... its the other side of going long ... plenty on the net about it ... (below from etoro - however avoid them , way way too expensive !!)
In essence, shorting is when a trader backs a certain market to decline. If their hunch is correct, then they will benefit.
“The inherent mindset of traders is to be positive and invest in a market when it is on the up, but you can make money when it goes down, too, by shorting,”
“If you know about shorting you should not care whether the market is going up or down, because it is possible to make money in both directions. Yet a huge number of people are not taking advantage of this strategy.”
It is crucial to understand that shorting is made possible through Contracts For Difference (CFDs), or derivatives, as they allow the trader to sell assets he or she doesn’t actually own. Simply put, a short trade is executed when a borrowed asset, or instrument, is sold at the current market price.
If the market moves the trader’s way thereafter, and the price of the asset declines, the value of their position increases. From there the trader can choose to buy back the now-cheaper asset and make a tidy profit.
Arguably the most famous example of shorting came in September 1992, when Hungarian-American investor George Soros netted approximately $1 billion after correctly predicting the British pound would drop when it was forced out of the European Exchange Rate Mechanism. More recently, in 2007, American hedge fund manager John Paulson waged against American subprime mortgage securities and generated $15 billion for his company.
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