Short Selling Definition:
Short selling (shorting) is a trading strategy that speculates on the decline in a an asset's price and involves selling a borrowed asset to rebuy it at a lower price.
What Is Short Selling
Short selling (or shorting) is a trading strategy used by investors to profit from the anticipated decline in the price of an asset. To short an asset means to borrow an asset to sell it and then buy it back at a lower price, realizing a profit from the price difference.
The concept of short selling originated in the 17th century, when Dutch traders began borrowing shares to sell them at current prices, aiming to repurchase them later at a lower price. This practice has evolved, becoming a critical component of modern financial markets as it allows for increased liquidity and price discovery.
