Category: Uncategorized

Key Takeaways
Short selling (or shorting) refers to the act of selling an asset with the goal of buying it back later at a lower price.

Typically, shorting is done with borrowed funds, meaning it requires an initial margin (collateral), maintenance margin, and interest payments.

Short selling is widely used by traders and investors who wish to speculate on the markets or as a hedging strategy to offset potential losses in other assets.

Shorting downsides include the potential for unlimited losses if prices keep rising, liquidations, risk of short squeezes, and additional costs like borrowing fees.

Key Takeaways
A bear market is a prolonged period of declining asset prices, often driven by economic downturns or geopolitical uncertainties.

Investors can navigate bear markets using strategies like dollar-cost averaging, short selling, or shifting to less volatile assets like cash, bonds, or stablecoins to minimize risk.

Despite their challenges, bear markets are a normal part of market cycles. Historical market data shows that established markets like the S&P 500 and Bitcoin managed to recover from all bear markets over time.