Glossary entry
A short position generally benefits from a fall in the referenced price and loses when that price rises. It can arise through selling borrowed shares or through derivatives that create negative price exposure. Borrowing obligations, contract settlement, financing, and margin treatment depend on the instrument, so different short positions can have very different risks.
Illustrative example
A short futures position loses value when its reference price rises. Its daily cash adjustments depend on the contract multiplier and size of the move.
What to consider
Some short positions can incur theoretically unlimited losses. Borrow availability, margin increases, and forced buy-ins can complicate an intended exit.
General information, not a personal recommendation. Product availability, rights, and obligations are determined by the relevant provider, jurisdiction, and approved agreements.