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If the stock market is in an upward trend and you have your eye on a stock that you think is ready to go up in price, it's easy to know what to do: buy. But suppose you see a stock you think is overvalued and due to fall in price in the near future. In that case, you can sell short. "Selling short" in the stock market means you agree to sell the stock (usually to your broker) at the current price, even though you don't actually own any shares. If the stock price does fall, you can buy it, deliver the shares and make a profit.
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What Is 'Selling Short' in the Stock Market?
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