Shorting and short selling
Most people know that shorting allows you to make money even when the market falls or stock prices fall. But what exactly is short selling, and how shorting performed in practice?
Shorting is to borrow such. shares at an agreed price, sell the shares and then (hopefully) buy back the shares at a later date at a lower price than what they sold for. Thus, one can make money on that stock prices fall.
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Shorting is definitely exciting, and in falling markets, it is often the safest way to make money.
What is shorting?
You may shorting most financial products, whether it is stocks, commodities or currencies.
For example, shorting a stock will tell you the borrower a share from someone, and then pay for it as a loan service at the price you agree on.
When shorter appointments Also available when the shares or securities shall be returned.
When shorting you are actually borrowing stocks, hoping that the price of the stock will drop like a stone.
Eventually the day comes where you're returning the stock, and then you have to buy back shares in the market. If the stock fell in value, you can thus buy the stock cheaper than what you sold it for.
Thus, you can make money even in falling markets...
Short selling in practice
Most engaged in a form of trading or investment know little about shorting, but few know how to run with shorting in practice.
When engaged in short selling as belonging only to the favors that physical borrow shares from other investors. It is then much more common to short in terms of buying options.
Online Brokers offering shorting
options are exciting, but unfortunately it is a bad option market on OSE. The alternative is to use foreign or more "international" online brokers, like brokers who have offices in strategic locations such as London, New York, Sidney and Cyprus.
It also has its own guides on how to make money shorting. It is quite easy to drive with shorting when you follow these guides.
Create an account with one of the above online brokers, it's free and you can at any of the above try a demo of the trading platform provided that you register with your broker first.
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