what is a short position 
a short or a short position is created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price a trader may decide to short a security when they believe that the price of that security is likely to decrease in the near future there are two types of short positions naked and covered a naked short is when a trader sells a security without having possession of it however that practice is illegal in the u s for equities it is banned fully in india and other countries a covered short is when a trader borrows the shares from a stock loan department in return the trader pays a borrowing rate during the time the short position is in place in the futures or foreign exchange markets short positions can be created at any time investopedia nono floresunderstanding short positions