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Financial encyclopediaReviewed 2026-10-23

Short Sales

A short sale occurs when you sell stock you do not own. Investors who sell short believe the price of the stock will fall. If the price drops, you can buy the stock at the lower price and make a profit. If the price of the stock rises and you buy it back later at the higher price, you will incur a loss.

Sources and references ↗
PROFILE / FACT FILE

Concept at a glance

Term
Short Sales [1]
Subject area
Investor.gov glossary [1]
Jurisdiction / scope
US regulatory and investor-education context [1]
Primary reference
SEC · Investor.gov [1]

Definition and explanation

A short sale occurs when you sell stock you do not own. Investors who sell short believe the price of the stock will fall. If the price drops, you can buy the stock at the lower price and make a profit. If the price of the stock rises and you buy it back later at the higher price, you will incur a loss. [1]

Source-supported connections

Short Sales → Mentioned in the official explanation → Profit [1]
Short Sales → Mentioned in the official explanation → Stock [1]

Frequently asked questions

What does Short Sales mean in the cited reference?

A short sale occurs when you sell stock you do not own. Investors who sell short believe the price of the stock will fall. If the price drops, you can buy the stock at the lower price and make a profit. If the price of the stock rises and you buy it back later at the higher price, you will incur a loss. [1]

RELATION MAP

Short Sales connection map

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Short Sales

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Links retain their source-specific meaning. Award-time affiliations and links to related reading are not claims about current appointments or economic causation.

Sources and review dates

  1. US SEC · Investor.gov — Short Sales ↗

Reviewed 23 October 2026. Historical dates and award-time affiliations retain their original context. A review date is not an event date. Background sources are identified separately from official records.

Content preparation: source-based compilation with AI assistance. See methods and attribution. Named sources identify the underlying records; no individual expert review is claimed.