Mutual Funds

Hedge Funds

What is a “short position”?

A short position occurs when an investor or investment company borrows shares of stock from a broker and sells them on the open market at a later time. Since the stock must be returned or sold back to the broker at some future date, if the investment price falls, the investor may then buy it for less than the price he originally paid, earning a profit.


This is a web preview of the "The Handy Investing Answer Book" app. Many features only work on your mobile device. If you like what you see, we hope you will consider buying. Get the App