Printer Friendly


SHORTING is when investors, either themselves or through a broker, borrow shares in a company from someone who owns them.

They then sell the shares on the open market.

The investors gamble on the share price falling, perhaps because they think the shares are overvalued or because the firm faces tough times ahead.

If the share price falls, they then buy back the shares at the lower price, hand them back to whoever they borrowed them from, and keep the difference.

However, they can get caught out if they borrow shares, sell them, but the prices rises.

They then have to buy them back at a certain time, hand them back but take a hit on the difference.

COPYRIGHT 2018 Scottish Daily Record & Sunday
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2018 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Daily Record (Glasgow, Scotland)
Date:Apr 9, 2018
Previous Article:PS3billion gamble on High St giants' shares tumbling; shorters bank on flops City dealers predict turmoil for Debenhams, M&S, Pets at Home and...
Next Article:Support for the Union unchanged.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters