📈📊SHORT POSITION 

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Now this is a term you've probably heard when hanging out with friends 

who've dabbled with trading! A short position (or short) means selling an 

asset with the intention of rebuying it later at a lower price. Shorting is 

closely related to margin trading, as it may happen with borrowed assets. 

However, it's also widely used in the derivatives market and can be done 

with a simple spot position. How does it work, you ask? Let's see, shall 

we? 

When it comes to shorting on the spot markets, it's quite simple. Let's say 

you already have Bitcoin and you expect the price to go down. You sell 

your BTC for USD, as you plan to rebuy it later at a lower price. In this 

case, you're essentially entering a short position on Bitcoin since you're 

selling high to rebuy lower. Easy enough. But what about shorting with 

borrowed funds? 

This is a bit more complicated. You borrow an asset that you think will 

decrease in value. You immediately sell it. If the trade goes your way and 

the asset price decreases, you buy back the same amount of the asset that 

you've borrowed. You repay the assets that you've borrowed (along with 

interest) and profit from the difference between the price you initially sold 

and the price you rebought. 

Still a bit confused? Let's see a practical example. We put up the required 

collateral to borrow 1 BTC, then immediately sell it for $10,000. Now 

we've got $10,000. Let's say the price goes down to $8,000. We buy 1 BTC 

and repay our debt of 1 BTC along with interest. Since we initially sold 

Bitcoin for $10,000 and now rebought at $8,000, our profit is $2,000 (minus the interest payment and trading fees). Boom, that's how you profit 

from the price going down! 

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