Short Position

Term definition

A Short Position is a trading strategy in which an investor bets on a decline in the price of an asset, such as a stock, option, or futures contract. To establish a short position, the investor typically borrows the asset from a broker and sells it, with the expectation of buying it back later at a lower price to return it to the lender. A short position can be profitable if the asset's price declines, but it carries the risk of unlimited losses if the asset's price rises instead.