InsiderFlow › Glossary › What is short selling?
Short selling is betting on a decline: you sell borrowed shares hoping to buy them back later at a lower price.
The mechanics: you borrow shares from your broker and sell them at 100; if the stock falls to 70, you buy them back, return them and pocket 30. If it rises instead, the loss is potentially unlimited: a stock can climb forever.
It's the weapon of bearish hedge funds like Michael Burry's, whose subprime short inspired "The Big Short". The GameStop 2021 saga showed the opposite risk: the "short squeeze", when losing shorts must buy back en masse and send the price vertical.
On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.
Yes, and regulated: only "naked shorting" (selling without borrowing the shares first) is banned.
Buying, you can lose at most 100%; shorting, the theoretical loss is unlimited.