Stock Market Advanced

Short Selling

💡 In plain English: Borrowing shares you don't own, selling them, hoping the price falls so you can buy them back cheaper and profit.

Definition

Selling borrowed securities with the expectation of buying them back at a lower price.

📌 Real-World Example

You believe Company X at ₹1,000 is overvalued. You borrow and sell 100 shares. Price falls to ₹700. You buy 100 shares, return them, and pocket ₹30,000 profit (minus borrowing costs).

🔢 Formula

Profit = (Sell Price − Buy Price) × Shares − Costs

Related Terms

Bear Market
When stock prices are falling broadly — investors are fearful and selling.
Volatility
How much a stock's price swings up and down — high volatility =...
Derivatives
Financial contracts whose value is derived from an underlying...
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⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.

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