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Welcome to your source for answers to questions about option concepts, strategies, and terminology. A new question and answer is published each week. To view the Ask the Institute archives, click the "Ask the Institute Archive" link below.

Please note, questions WILL NOT be personally answered and may not be chosen for publication on the web site.

View the archive of all "Ask the Institute" questions.

 

This week's question:

DATE: April 14, 2014

QUESTION:

Can you explain what it means to sell stock short?

ANSWER:
Selling stock short is a strategy that is more frequently referred to as "selling short" or "shorting stock." If a trader has a market outlook that the price of a specific stock will fall, then selling stock short is one commonly-used strategy that may attempt to profit from such a bearish forecast. To learn more about selling stock short, view this segment of "Ask the Institute."

CBOE Volatility Index (VIX)