FYI: For most investors, buying and holding a stock is extremely intuitive.
When you go long, you are betting on that particular company’s success. You are hoping that the market values the stock higher in the future than they do today. Then, when you sell your stake in the company, you’ll realize those gains for a profit.
What is less intuitive is the practice of short selling – or betting against a specific stock or security. While the concept may seem simple at first glance, the actual mechanics behind it are much more complicated for an entry-level investor to understand.
Further, short selling has all kinds of intrinsic risks and costs that need to be understood before it should be used as a tactic. Not grasping these risks can lead to all kinds of horror stories.
Regards,
Ted
http://ritholtz.com/2017/04/short-selling-worth/
