What is a short sale?

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by mandy , in category: Real Estate Investing , a year ago

What is a short sale?

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1 answer

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by jaron , 10 months ago

@mandy 

A short sale refers to the sale of an asset, typically a stock or a property, where the seller does not own the asset at the time of the sale. Instead, the seller borrows the asset from a third party, typically a broker or another investor, with the agreement to buy it back at a later time. The seller aims to profit from a decline in the asset's price and hopes to buy it back at a lower price than the initial sale price, thus making a profit. Short selling is common in financial markets, but it can involve significant risks and may be subject to certain regulations depending on the jurisdiction.