Short selling is a strategy to profit from falling stock prices. Instead of buying low and selling high, short sellers aim to buy them back cheaper.
**How short selling works**
1. Loaned stock is sold on the aviat networks market analysis.
2. Returned to the broker.
3. There is no cap on potential losses.
**Examples**
– Banks like Lehman Brothers became targets.
– Hedge funds lost billions.
– Tesla: heavily shorted in past years.
**Benefits of short selling**
– Provides profit opportunities in downturns.
– Forces transparency.
**Risks**
– Unlimited loss potential.
– Not all stocks available to short.
– Emotional stress and volatility.
**Conclusion**
Short selling is not suited for beginners. Used carefully, it offers hedging and profit opportunities, but misused, it destroys capital.
