Investors are familiar with the strategy that says to “buy low, sell high”, but what about the reverse – “sell high, buy low”? That is the basic premise behind short selling. While you may be intrigued by its potential to help you profit from a stock’s decline, it is important to first understand how the short sale process works. Learn more in this short video.
This lesson provides an overview of buying put options and the impact it may have on your portfolio.
Most investors will rarely, if ever, consider selling shares of an ETF short as part of their investment program. However, short selling in the ETF marketplace is a large part of ETF trading volume.
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Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Prior to trading options, please read Characteristics and Risks of Standardized Options, and call 800-343-3548 to be approved for options trading. Supporting documentation for any claims, if applicable, will be furnished upon request.
In order to short sell at Fidelity, you must have a margin account. Short selling and margin trading entail greater risk, including but not limited to risk of unlimited losses and incurrence of margin interest debt, and are not suitable for all investors. Please assess your financial circumstances and risk tolerance prior to short selling or trading on margin. Margin trading is extended by National Financial Services, Member NYSE/SIPC, a Fidelity Investments company.