Shorted: meaning, definitions and examples
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shorted
[ˈʃɔːrtɪd ]
Definition
finance terminology
Shorted refers to the practice of selling a security that the seller does not own, with the intention of buying it back later at a lower price. This trading strategy is typically used by investors who believe that the price of the security will decline. If successful, shorting allows investors to profit from a decrease in prices. However, it can be risky, as potential losses are theoretically unlimited if the price of the security rises instead.
Synonyms
bet against, sell short, short selling.
Examples of usage
- He shorted the stock before the companies announced bad news.
- Many investors have shorted the shares of the tech company.
- She was nervous after shorting because the market was volatile.
Interesting Facts
Etymology
- The term originates from the word 'short selling', which dates back to the 1600s when traders would sell things they didn't own.
- In finance, 'shorted' refers to making a bet against an item, anticipating its value will decrease.
Finance
- Shorting is a popular strategy among traders in stock markets to profit when prices drop.
- It can be risky because if prices go up instead of down, the losses can be infinite since there's no cap to how much the price can rise.
Cultural Impact
- The concept of short selling has entered popular culture, often depicted in movies about Wall Street and financial crises.
- Public sentiment towards shorting can be negative, especially if a company is struggling, as it’s seen by some as betting against businesses.
Psychology
- Short selling can evoke varied emotional responses, including fear and greed, affecting trader behavior.
- Understanding the psychology behind this trading strategy can reveal why investors make bold or cautious choices.
Recent Developments
- The rise of retail trading platforms has allowed more individuals to engage in shorting, a practice once limited to institutional investors.
- Incidents like the GameStop short squeeze in 2021 highlighted how social media can influence shorting strategies and market dynamics.
Translations
Translations of the word "shorted" in other languages:
🇵🇹 encurtado
🇮🇳 छोटा किया हुआ
🇩🇪 verkürzt
🇮🇩 pendek
🇺🇦 скорочений
🇵🇱 skrócony
🇯🇵 短縮された
🇫🇷 raccourci
🇪🇸 acortado
🇹🇷 kısaltılmış
🇰🇷 짧은
🇸🇦 مختصر
🇨🇿 zkrácený
🇸🇰 skrátený
🇨🇳 缩短的
🇸🇮 skrajšan
🇮🇸 styttur
🇰🇿 қысқартылған
🇬🇪 დაკვეტილი
🇦🇿 qısa
🇲🇽 acortado