Short position
Principles of Finance glossary · Financial Statements, Markets & Working Capital
Definition
A position that profits when the asset's price falls.
Short position in plain English
Normally you buy something hoping it goes UP; a short position is the mirror image — you profit when the price goes DOWN. The trick is you borrow the asset (say, a share of stock), sell it now at today's price, and promise to buy it back later to return it; if the price falls, you buy it back cheaper and keep the difference. Imagine borrowing a friend's concert ticket, selling it for $200 today because you think demand will crash, then buying a replacement for $120 next week to hand back — you pocket the $80. The danger is that if the price rises instead, you're forced to buy back higher and take a loss.
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