Short Selling Definition
Learn the definition of short selling and other ETF terminology from the etf.com glossary.
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Short Selling in ETFs involves selling shares with the anticipation that their value will decline. This strategic approach allows investors to profit from falling prices by buying back the shares at a lower price later on. Short selling in ETFs is facilitated through borrowing shares and selling them on the open market, creating a potential profit if the ETF's value decreases. While offering a unique avenue for capitalizing on market downturns, short selling requires a comprehensive understanding of market dynamics and risk management due to the potential for unlimited losses in the event of rising prices.
