Short Selling entails selling shares borrowed with the intention of buying those shares back at a lower price, thus making profit from the difference between the short sale price and the buyback price at a later time.
In short selling, a position is opened by borrowing shares of a stock or other asset that the investor believes will decrease in value by a set future date of expiration. The investor then sells these borrowed shares to buyers willing to pay the market price.
Before the borrowed shares must be returned, the trader is betting that the price will continue to decline, and they can purchase them at a lower cost.
For more information on short selling, please contact a Boursa Kuwait authorized broker. To view the short selling bulletin, click here.