CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Short Position

  • Glossary
  • ABC of Investing
1 minute(s)
Being short on the market means that you are selling some marketable assets, expecting the financial instruments to lose value. The reverse of a short position is a long position.
  • Being short on the market means that you are selling some marketable assets, expecting the financial instruments to lose value.
  • The reverse of a short position is a long position.

If a trader expects that the selected financial instrument will lose value, then they usually take a short position on that instrument, in other words, they sell the instrument. The word ‘short’ in the phrase ‘short position’ has nothing to do with the amount of time a trader plans to hold the market position before it closes.

When trading shares, not CFD shares, taking a short position also involves borrowing shares from a broker. These shares are owned by the broker, and can only be borrowed by clients or partner brokers. Generally speaking, short selling can be defined as the sale of a financial instrument that is not currently in the position of the investor.

To learn more about how to take a long or short position on the xStation platform, feel free to read our article on How to Place an Trade on xStation 5.

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