Short sellers profit when security prices decline.

Name: Short sellers profit when security prices decline.
Brand: Quizplus
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Question

Short sellers profit when security prices decline.​

Quizplus · Accepted Answer

Short sellers borrow shares and sell them at the current high price, anticipating that the price will fall in the future. They then buy the shares back at a lower price to return them to the lender, making a profit from the difference between the sale price and the buyback price. If the price goes up instead of down, short sellers will lose money.

Short Sellers Profit When Security Prices Decline.​

Short Sellers Profit When Security Prices Decline.