In stock trading, ‘Short’ refers to the direction of the trade (which is profitable if the stock price declines). In order to enter a ‘Short position’, stock must be borrowed from a stock loan provider which is arranged through the stock broker. The borrowed stock obtained can then be sold in the normal manner through the stock market. To exit the ‘Short position’, stock is bought from the stock market and this stock is handed back to the loan provider where the stock was originally borrowed from.
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