Short selling


    In News

    • Short seller Hindenburg Research disclosed short positions in Adani Group, alleging stock manipulation and accounting fraud in its latest investigative report.

    About Short selling 

    • It is a trading strategy based on the expectation that the price of the security will fall. 
    • It is an investment or trading strategy that speculates on the decline in a stock or other security’s price.
    • It occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money.
    • Short sellers bet on, and profit from, a drop in a security’s price. This can be contrasted with long investors who want the price to go up.
    • Short selling has a high risk/reward ratio: It can offer big profits, but losses can mount quickly and infinitely due to margin calls.

    Source: IE