GLOSSARYShort Selling

Short Selling

Short selling, also known as ‘shorting’, refers to when a trader opens a ‘short’ position on an asset, such as a cryptocurrency. Shorting an asset simply means selling the asset at its current price with the plan to buy it back after some time when its price drops.

Short selling is usually performed by experienced traders who try to capitalise on an anticipated drop of an asset’s market value. In this case, a short seller borrows an amount of the asset against collateral and sells it immediately. Then, they buy back the same amount of borrowed assets when its price drops to pay back the borrowed assets and borrowing fees, making a profit off the difference between the prices.

Learn more about Bitcoin shorting.

Key Takeaway

Short selling is a form of advanced trading of assets, where a ‘short’ position is opened on an asset when the trader anticipates a drop in its price; a short sell is only profitable if the asset’s price decreases.

Related Words

Market Cap

Market cap refers to the total dollar value of a cryptocurrency in circulation. It is calculated by multiplying the token price by the total number of tokens.

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Circulating Supply

Circulating supply is the amount of a cryptocurrency currently on the market. The number can grow or shrink for various reasons.

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TradFi

Traditional finance, or TradFi, is a conventional approach to financial activities that relies on established institutions, such as banks, insurance companies, investment companies, and stock exchanges.

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Collection Value

Collection Value is the aggregated monetary value of all the NFTs in a collection.

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NFT Sales Volume Index (7D)

The NFT Sales Volume Index (7D) shows the price and number of editions of a non-fungible token (NFT) collection sold over a 7-day (7D) period.

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Crypto Asset

Crypto assets are transferable digital representations of value made possible by cryptography and blockchain technology.

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24H Volume

24H Volume shows the number of a cryptocurrency’s tokens traded over a 24-hour time frame.

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7D

7D, short for seven days, refers to price data that has been collected for a cryptocurrency over a 7-day period.

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Floor Price

Floor Price is equal to the lowest-priced NFT in a collection.

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Gas (ETH)

Gas is the cost of a transaction on the Ethereum network.

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