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.
Short definition
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. There are two main methods of short selling:
- 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.
- Derivatives such as CFDs enable traders to open short positions that do not require borrowing the underlying asset.
There are other ways of opening short positions. Digital 100 binaries offer a simplified form of option that do not require the trader to own the underlying asset, for instance.
As an asset could theoretically increase in price indefinitely, short selling requires careful risk management to prevent losses from overrunning.
With IG
We offer a variety of different ways to trade on markets that are moving lower in price. For example you can trade CFDs on a variety of markets, including traditional assets such as shares as well as interest rates, option prices or entire sectors.
Contact us
24 hours a day from 10am Saturday to Friday night at midnight.
You can also email helpdesk.za@ig.com
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.