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Saturday, July 16, 2011

How To Sell A Stock You Don't Own

How do you sell a stock you do not own? First you borrow the stock from a third party (your broker) and sell it to someone else. Later, when the share price drops you buy it at a lower price and return to your broker, thus making a profit. This is known as short selling.

Short selling (also known as going short or shorting) is the practice of selling stocks that have been borrowed from a broker,

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