Short Sale

The article may contain affiliate links from partners. Our reviews and opinions are our own. Learn how we make money to support our financial wellness mission.

A short sale occurs when you sell stock you do not own. Investors who sell short believe the price of the stock will fall. If the price drops, you can buy the stock at the lower price and make a profit. If the price of the stock rises and you buy it back later at the higher price, you will incur a loss.