Forex trading involves risk. Losses can exceed deposits

Short definition

Forex trading involves risk. Losses can exceed deposits

Short has a particular significance in relation to IG's platform. Here, we define short in general investing and explain what it means to you when trading with IG.

In trading, short describes a trade that will incur a profit if the asset being traded falls in price. It is also often referred to as going short, shorting or sometimes selling.

Shorting is the opposite of going long, or trading to incur a profit if your market increases in price.

The most well-known method of shorting is short selling. A main methods of short selling is:

  • When a trader borrows an asset they do not own from a broker and sells it on the market. Usually the borrowing and selling of the asset is taken care of by the broker.

There are other ways of opening short positions.

As an asset could theoretically increase in price indefinitely, short selling requires careful risk management to prevent losses from overrunning.

Find out more about managing risk

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