Short selling (shorting) a stock means selling a stock that you don’t own. That might sound confusing but is very simple. You are basically betting that the price of a stock is going to drop. The concept is borrowing a stock that has high price, selling it, and when it drops you buy it and redeem what you owned. You would make money on the difference. However, there are many risks to shorting a stock because the price may rise and in theory you can lose a lot more.
Driver of the Market
The most important economic report this week for investors is going to be this Friday’s Employment report. While there is still uncertainty due to sequestration, the anticipation of this report on Wall Street is huge, and gives a lot of information about the strength of the economy to investors.
You can check the Employment Report when it comes out this Friday at 8:30 AM ET: