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How does "go short" works? I understand "go long" is when you buy low and sell high. What is the opposite?
by artemonster 6y ago
How does "go short" works? I understand "go long" is when you buy low and sell high. What is the opposite?
- amerkhalid 6y ago"Go short" means you sell first, then buy it back later. If you think AAPL is going lower, you can borrow shares from your broker and sell those. And when it goes down, you buy back shares at lower price and return them to broker with interest.
- artemonster 6y agothanks!
- currymj 6y agoyou borrow a share of stock from someone (like literally they loan it to you), then go sell it and keep the money. eventually, you go to the market, buy another share of stock, and give it back. if you sold high and bought low, you make money.
- deandree 6y agoTo simplify - when you long, you bet on price going up. When you short, you bet on price going down. If you went short and price dropped 5%, your profit is 5% (minus commission, slippage, and some other stuff).