How Does Short Selling Work?

The goal of short selling is to take advantage of securities whose prices are expected to decline. Hypothetical Security Price Movements: The investor borrows the security and sells it short on the market, providing cash to the lender as collateral. If the security price rises, the investor buys it at the higher price and returns it to the lender, taking a loss. If the security price falls, the investor buys it at the lower price and returns it to the lender, taking a gain. The investor also receives interest on the collateral from the broker and pays the broker a lending fee for borrowing the security. For illustrative purposes only.

ALTERNATIVES ARE THE NEW REALITY

Discover why investors are looking beyond traditional assets.