How do I calculate the short selling?
When considering Short Selling, it is important to understand the formula for calculating it. The formula is as follows:
Short Selling = Security Borrowed - Security Purchased. This means that an investor will borrow a security and then sell it in order to purchase a new security. In order to determine the value of the security borrowed and the security purchased, investors should use a program such as Sourcetable to keep track of their calculations.
What are the risks of short selling?
The risks of short selling are similar to any other type of investing, such as the potential for losses in adverse market conditions. In addition, short selling can be difficult to exit due to the need to purchase the security at a higher price than the sold price.