A short sale occurs when you sell stock you do not own. Investors who sell short believe the price of the stock will fall. If the price drops, you can buy the stock at the lower price and make a profit. If the price of the stock rises and you buy it back later at the higher price, you will incur a loss.
Investing Quiz – June 2021
Test your knowledge on common investing terms and strategies and current investing topics.
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Read this Director’s Take article to understand the risks of engaging in this type of speculative investing.