Definition of Going Short
What does the term "going short" mean when it comes to the stock market? What is the definition of the term "going short"?
"Going short" is when you initiate a short position in a stock.
A short position is when you believe that a stock is going to drop in value, so you sell shares with the hope of buying them back at a lower price.
"Going short" is, as you can probably guess, the opposite of "going long", which is when you buy a stock.
Here are a few examples of when you would use the term "going short":
Example #1: "XYZ reported weak earnings after the bell today. I fully expect that XYZ will drop 30-50% over the coming months, so I am planning on going short after the opening bell tomorrow."
Example #2: "XYZ's CEO and CFO announced that they are both leaving the company. This can't be good news, so I have decided that I am going short on XYZ over the next couple of days."
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