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Short Position

Short position refers to the selling of a borrowed commodity, currency or security with the outlook that the funds will fall in prices. Besides, in the meaning of options, short position represents the sale of an options' contract. Its contrary is long or long position.

Short Position

As an example is an investor’s borrowing the shares from a broker and then selling them on the open market where the short position is. Then the investor must return the stock he had borrowed by buying it from the market that is open. And if the price of stock falls, the investor will make a profit from buying it for less than he sold the stocks.

Related: Long Position, Position, Fibonacci calculator