Short selling is one of the most misunderstood strategies in the stock market. Most beginners think making money only means buying low and selling high, but there's another side to the game where traders can potentially profit when a stock falls. The catch? If it goes wrong, losses can grow far beyond what most people expect.
In this video, we break down exactly how short selling works from start to finish: the mechanics of borrowing and selling shares, the step-by-step process through a margin account, the hidden costs that eat into profits (borrow fees, margin interest, dividend payments), and the one risk that makes short selling famous: the short squeeze.
We walk through real examples with actual numbers so you can see both the profit and loss scenarios, explain SEC regulations like Regulation SHO and the alternative uptick rule, cover the 2026 Avis Budget short squeeze where shares surged fourfold, and lay out a practical five-step framework for evaluating any short trade before...
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