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Short Selling
Short Selling is an advanced trading technique when the seller doesn’t even own a security. The seller borrows the stock from the broker, sells it and than hopefully buys it back at lower price that he sold it. After buying it back, the stock must be returned to the broker from whom it was borrowed; also the commission must be paid to the lender.
In order to cover its short position and profit from buying the stock back, investor must have large trading knowledge, so novice investors should avoid this strategy.
| Related Terms: Short Sale Short Sell Against the Box |