Borrowing shares to sell now and buy back later
Short selling means borrowing stock you do not own, selling it, then buying it back to return. If the price falls you buy back cheaper and profit; if it rises you buy back dearer and lose. Because a price has no ceiling, the loss has no theoretical limit — the sharpest difference from simply owning a stock.
Short 100 shares at $1,000 and cover at $800 for a $20,000 gain. Cover at $1,300 instead and you lose $30,000.
Japan — In Japan a short position of 0.2% or more of the issued shares (and over 50 trading units) is reported to the exchange, which publishes positions of 0.5% or more (as of 2026). Once a stock falls 10% or more from its base price, short sales at or below the latest price are generally prohibited.
South Korea — Korea banned short selling entirely from 6 November 2023 and fully reopened it on 31 March 2025. Shares borrowed to sell short must be returned within 90 days, or 12 months at most with extensions.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.