I sold $BTC but still want to earn from the Market by Short Selling $BTC
**Short Selling** is an investment strategy where investors profit from the decline in the price of an asset (usually stocks). Specifically, the short selling process occurs as follows:
### **How it works:**
1. **Borrowing the asset**: The investor borrows shares from another party (usually a brokerage or securities lending organization).
2. **Selling immediately**: They sell the borrowed shares on the market at the current price.
3. **Buying back later**: When the stock price decreases as expected, they buy back the same number of shares at a lower price.
4. **Returning the shares**: They return the borrowed shares to the lender and take the difference (profit = Initial selling price - Buyback price).
### **Example:**
- You predict that stock ABC (currently trading at 100,000 VND/share) will decrease.
- You borrow 10 shares of ABC from the brokerage and sell them on the market, earning **1 million VND**.
- Later, the price of ABC drops to 80,000 VND/share, you buy back 10 shares for **800,000 VND**.
- Return the shares to the brokerage and earn **200,000 VND** (excluding fees).
### **Risks of short selling:**
- **Unlimited risk**: If the price rises instead of falling, the investor must buy back at a higher price, leading to unlimited losses.
- **Borrowing costs**: Must pay interest and fees on borrowed shares.
- **Forced buying (Short Squeeze)**: When the price rises sharply, many short sellers must buy back at the same time, driving the price even higher.
### **Applications:**
- Investors use short selling to **bet on a declining market** or **hedge risks** for their existing portfolio.
- Often employed by hedge funds or professional investors.
