So What Is Short Selling? An Explainer

Illustration: Connie Hanzhang Jin / NPR. Article by Rafael Nam. NPR – January 28, 2021.

By now, you’ve probably heard that an army of amateur investors ganged up on short sellers, causing them painful losses while sending shares of the beleaguered retailer GameStop soaring. You also may be asking, OK, but what is short selling?

Short selling has nothing to do with summer wear or workout gear. It’s a common but controversial way of trading in financial markets. Let’s say an investor decides a company’s share price is overvalued and likely to fall. […]

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