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Short Sale

What is a short sale?

A short sale is the sale of a security that the seller does not own.

This is a highly speculative form of trading where the seller believes that the price of a security is going to fall and they will be able to cover the sale by buying back the security at a lower price.

The profit would be the difference between the initial selling price and the subsequent purchase price. It is an illegal practice not to declare the trade a "short sale" when the order is placed.