If a FX speculator sells USD that the speculator currently does not hold the speculator has entered into a:
A) a hold position in the USD.
B) a long position in the USD.
C) a short position in the USD.
D) forward position in the USD.

Question

Quizplus · Accepted Answer

When a FX speculator sells USD that he/she does not currently hold, they are essentially borrowing USD and then selling it in the market. This is known as a short position, as the speculator expects the value of the USD to decrease so that they can buy back the same amount of USD at a lower price and make a profit.

If a FX Speculator Sells USD That the Speculator Currently