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Short selling

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What is the process of short selling? Who does what?
Why would an investor want to sell a stock short? How do the risks of short selling differ from the risks buying a stock?

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Solution Summary

Risks of short selling are examined.

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Short selling involves borrowing a stock from a broker, selling it and then buying it back at a lower price (hopefully). Then the stock would be returned to the broker and the broker would return it to the original owner of the stock.

This is a way to profit off a stock that goes down instead of going up. The profit is the difference ...

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