Stock portfolio, short selling

rewrite “Short selling is an investment or trading strategy that speculates on the decline during a stock or other security’s price (Engelberg, Reed, and Ringgenberg, 2018). It is a speculation for investors. Speculation carries the likelihood of considerable risk and is a complicated trading method. Hedging may be a more common transaction involving placing an offsetting position to scale back risk exposure. In short selling, an edge is opened by borrowing shares of a stock or other asset that the investor believes will decrease in value. The investor then sells these borrowed shares to buyers willing to pay the market value. Before the borrowed shares must be returned, the trader is betting that the price will still decline which they will buy them at a lower cost. The risk of loss on a brief sale is theoretically unlimited since the worth of any asset can climb to infinity. A long position is that the opposite of a brief position. The term long position describes what an investor has purchased once they buy a security or derivative with the expectation that it’ll rise in value.”