What is short selling?

Some of you is probably on your own. But who of you can explain short selling?

If you belong to this group who have never thought of this – don’t worry. I know many profitable traders who would not be able to explain the shiny försäljningsmekanismen. It is easy thing to even put a thought on. The market goes down, we sell and take the profit, or how?

In short – yes. Keep in mind that when you are dealing with dollars, euros, yen, gold or oil, you can buy or sell contracts for difference (CFD). More experienced traders use Futures, but we don’t need to worry about today. Thanks to the CFD instrument you can easily sell an asset you do not own in the portfolio. When you short sale of oil borrow it from your broker and pay him the current market price. When your prediction proves to be correct and the price of the raw material actually falls, you will be able to buy back the borrowed crude oil at the market by paying a lower price. The difference between the sale price and the purchase price becomes your profit.

Without a doubt, the most well-known blank, the transaction made in september 1992. At the time, sold the Hungarian-american investor George Soros short pounds worth a billion dollars, and correctly assumed that the united kingdom would lower the exchange rate mechanism ERM. Another case was the John Paulsons decision in 2007 against all the odds, made a blank sales MBS (mortgage loans). Paulson made 15 billion dollars with its bold decision.

If you are not just going to use tjurmarknaden, but also björnmarknaden, should you be interested in eToro. The social commerce platform makes it possible for six million customers to sell thousands of financial assets – including kryptovalutor and stock markets. During the last massförsäljningen of Bitcoin went many eToro users to björnmarknaden by adding high yields in record time. In the middle of september, the BTC / USD with only 30% in just two days.

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