| For many who own stocks, there is little or no | | | | the stock as a loan, which you in turn sell. The |
| strategy attached to their purchases - buying stocks | | | | money from that sale is put into your account with |
| for them is an almost automated process because | | | | the broker, and once the stock actually falls, you buy |
| they utilize a broker who advises them on what to | | | | it again at the lower price. You then return the |
| buy and when, as well as when to sell. For some | | | | stocks to your broker, and keep the difference |
| investors, however, buying stocks is a more | | | | between the sale price and the price you pay to |
| hands-on activity. You know the type: they are | | | | re-purchase them. |
| continually scouring the headlines and stock quotes | | | | For those who are serious about buying stocks to |
| looking for every new occurrence that might serve | | | | make short-term profit, short selling offers an |
| as an indicator of the next big stock opportunity. | | | | incredible opportunity to turn over a profit in very |
| Still others use a process call short selling to both | | | | little time. It does not, however, come without the |
| diversify their portfolio, and earn short term returns | | | | risk of loss. In fact, for many investors, the risk that |
| on their investments. For those familiar with buying | | | | the stock might actually increase in value is a strong |
| stocks, the act of short selling has a well-earned | | | | deterrent to short selling activity. |
| reputation for being risky if the investor is less than | | | | After all, if the stock rises in value, you are required |
| adept in his or her research and decision making | | | | to pay your broker the difference in price. On any |
| process. | | | | serious short selling transaction, that difference can |
| Short selling is the process of selling a stock that you | | | | sometimes run into the tens of thousands of dollars. |
| believe is going to decline in its value. It requires a | | | | For anyone buying stocks and considering short |
| broker, and a savvy investor. To make it work, you | | | | selling, the prudent course of action is to never |
| have to research and identify a stock that you feel | | | | implement a strategy until you have researched its |
| will soon drop in value. Your broker then gives you | | | | every aspect. |