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FC MARKETS

Markets, money and the economy, explained for American investors

Topic

Short Interest

1 article

Stocks

Short Selling Explained: How Shorting Works, Short Squeezes and the Risks

Short sellers bet that a stock will fall by borrowing shares, selling them and hoping to buy them back cheaper. The idea is simple, but the mechanics, costs and risks are not. Here is how shorting works, what a short squeeze is, why losses can be unlimited, and what short interest does and does not tell you.

6 min read