What does shorting a stock mean?
Most investors aim to benefit from stocks or shares that are forecasted to have the potential for future growth and development. However, short selling or shorting stocks is a trading technique that involves profiting from the decline of a company’s share price.
Traders who follow conventional trading strategies are usually looking for markets that are becoming more relevant or companies that are outperforming the market average. However, short-sellers do the opposite. They look for shares that are underperforming in the market or shares that could become less relevant in the near future.
This can be a high-risk/reward strategy that involves a lot of upfront capital, meaning it is usually the domain for experienced and professional investors.