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How does short selling with CFDs work?

Short selling with CFDs (contracts for difference) is a way for investors to profit from falling prices in a security or market. In short selling, an investor borrows a security from another investor and sells it on the market, hoping to buy it back at a lower price in the future and return it to the lender. With CFDs, investors can short sell without actually borrowing the underlying security. Instead, they enter into a contract with a broker to receive the difference in value between the current price of the security and its future price. If the price of the security falls, the investor can make a profit by buying it back at a lower price and returning it to the broker. However, if the price of the security rises, the investor may incur a loss. Short selling with CFDs can be a risky strategy and is not suitable for all investors.

“If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential ” – Ray Dalio

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