[Grizzl3]

Can someone explain what it actually means to ‘go short’ in trading? I keep seeing the term but not entirely sure how it works.

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[Steve]

To go short (or short selling) means you’re betting that the price of an asset will go down, not up. So instead of buying low and selling high, you’re doing the opposite: you sell high first, then aim to buy low later to profit from the drop.

CFDs are a super common way to short various assets without borrowing them. You could also buy put options or open a margin account to short stocks.

The big thing to remember with shorting is that losses are effectively uncapped because the price can keep rising.

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