CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing all your money. Read full risk warning.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

How Do You Short Selling Stocks?

Stocks and short selling could potentially work well together, but could also be risky.

Filip Dimkovski - Writer for Fortrade
By Filip Dimkovski
Korana Braun - Editor for Fortrade
Edited by Korana Braun

Published May 18, 2024.

Hand holding a small tube with a hypodermic needle signifying biotech stocks

Short selling is an investment technique where investors borrow shares from a lender and then sell them in the open market, hoping to buy the stock back at a lower price later. Investors potentially profit from the difference between the purchase price at which they sold the stock and the lower buy-back price.

Note: Fortrade offers the ability to trade the price changes of instruments with CFDs and NOT to buy/sell ownership of the instrument itself



» Explore the main drivers of stock price movements and why tech stocks fall when interest rates rise

Risks of Shorting Biotech Stocks

Biotech stocks have a higher degree of volatility than most other sectors due to their reliance on scientific advancements and regulatory changes.

Investors should be mindful that speculative investments in biotech stocks can lead to large potential losses if the stock does not perform as expected. To be prepared for risk, investors should employ careful strategies such as diversifying their trading accounts and setting stop-loss orders when making short trades on biotech stocks.

» Ready to trade CFDs? Learn more about opening an account with Fortrade

Short selling demands careful research, technical acumen, and a thorough understanding of market dynamics. Some things you should consider before deciding to trade include:

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