What is short selling?

The aim of short selling is to profit on a stock when the price decreases.

To enter a short sell position, you “borrow” a stock and sell it, with the intention that you will close the position by buying the stock back some time in the future. The idea is that you sell the stock when the price is higher, and buy it back when the price is lower.

More broadly, being “short” refers to a position that profits from the asset price falling. This is the opposite of a “long” position, which profits when the asset price rises. The traditional buy-and-hold investing approach (where you buy stocks and hold them until they grow in value) is an example of a long position.

Can I short sell with CommSec?

No. A CommSec Share Trading Account only allows you to sell stock that you already own. When you provide sell instructions online or over the phone, you must confirm that you are selling stock you own. If you are selling issuer sponsored stock, you’ll need to transfer them from the share registry to your CommSec account before you can sell them.

Although you can’t short sell stock through a CommSec Share Trading Account, you may be able to establish a short exposure to a stock by using Exchange Traded Options (ETOs) or Warrants*.

Find out more about ETOs here, or contact the CommSec Options desk on 1800 245 698 between 8am and 5:30pm (Sydney time).

*Please consider the ETO Product Disclosure Statement issued by CommSec and the Product Disclosure Statement for the Warrants series, before making any decision about these products. As this information has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances.



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