How Canadian Markets Work

Episode 10: Short Selling

Hosts: John and Jane Runtime: 14 Minutes

Episode Summary In this episode, John and Jane explain the counter-intuitive process of selling something you do not own. They break down the mechanics of short selling—borrowing shares to sell high now and (hopefully) buy back lower later—and why this strategy is structurally inverted from traditional investing. While John highlights the useful role short sellers play in identifying corporate fraud, Jane provides a blunt reality check on why the unlimited risk and continuous costs make this a dangerous strategy for retail investors.

Key Concepts

• Borrowing to Sell: Short ...