Short Selling
Definition
A trading strategy where an investor borrows shares and sells them, hoping to buy them back at a lower price. The investor profits if the stock price falls and loses money if it rises.
Related Terms
Short Position
The number of shares of a particular stock that have been sold short but not yet covered or closed out. On the ASX, significant short positions must be reported to ASIC.
Securities Lending
The process by which shares are borrowed from institutional holders (like superannuation funds) to facilitate short selling. Lenders receive a fee for making their shares available.
Short Squeeze
A rapid increase in a stock's price caused by short sellers rushing to cover their positions. When many shorts try to buy shares simultaneously, it can drive the price up dramatically, forcing more shorts to cover.
See short selling in action
Explore real-time ASIC short position data for ASX stocks.