Short position (or short exposure)

By | 2017-09-13T15:37:42+00:00 13th September 2017|

A short position is when an investor borrows from a holder a share or other financial instrument (for a fee) and then sells it. The investor carries out this action in anticipation of the price falling and the share or position being able to be repurchased at a lower price later, thus generating a profit. The investor finally returns the borrowed shares. Conversely, a ‘long position’ is buying a similar asset in the belief that its price will rise, with the aim of making a gain from the increase.