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Going Short: What Does It Mean? | SterlingTerrell.net

Going Short: What Does It Mean?


Short Position Payoff Chart

 What does it mean to "go short" a commodity, stock, or index?

It simply means: To sell.

To enter into a short position, you simply sell that asset.

If you sell some type of asset - that means at some point in the future, you have to get out of the position.

And to get out of a short position - you simply buy it back.

Another way of saying the same thing is:

In a short position, you will have a profit if prices decrease.

Conversely, in a short position, you will have a loss if prices increase.

Going short has unlimited potential profit as prices fall - and unlimited potential loss as prices rise.