Short Position

Short Position is a term describing a market position benefiting from a price decrease. You are "going short" when you open a position to sell a security, commodity, or some other financial market. You are most likely bearish towards that financial instrument because you are selling in anticipation of a decrease in price. When you "go short", you are actually borrowing shares or contracts from a brokerage firm in order to sell them. If the market maintains its bearish trend, you can buy those shares at a lower cost at a later time to fulfill your loan commitment while simultaneously making a profit. To open a short position, you must establish a margin account with your brokerage house.