How to short a stock on WeBull
WeBull offers commission-free US stock, ETF and options trading with no inactivity fees. To short sell on WeBull , you need a margin account and your net account value must be greater than or equal to $2,000.
What does shorting mean?
A short sale (or 'shorting') is when you sell a stock you borrowed (from your broker) at the current price, in the hope of buying it back later for less money and pocketing the difference. It is the opposite of taking a 'long' position, i.e. buying a stock, in the hope that its price will increase.
How to short stocks on WeBull
- Open up your WeBull account or app
- On the app: go to the 'Watchlist' tab
- Search for the stock you want to short
- Check for a blue downward arrow icon, if it is there, you can short sell this stock
- Tap the 'Trade' button
- Select 'Sell'
- Submit the order
Your new short position will be displayed under the 'My Positions' section as a negative quantity.
Keep in mind, that for short selling, you will need to borrow the shares of a company’s stock before you can sell them. The cost associated with a short sale on WeBull is the borrowing fee paid for this company’s stock in the margin account. The borrowed stock’s margin loan rate changes on a daily basis based on the market conditions.
The risks of short stocks on WeBull
Short selling is a high-risk strategy and not for beginner traders. When you sell short, you sell stocks you do not own. You borrow these stocks from your broker. Short sellers want to profit from an expected decrease in the stock price. If the price of the stock drops, short sellers can buy the stock back at a lower price and then return it to their broker. The difference in price is their profit. However, if the price goes up, short sellers lose money. The higher the price goes, the bigger the loss.
While if you take a long position, there is no limit to how high a stock can rise, the worst that can happen is that the stock loses all its value and you lose your money, but no more than what you have invested. In contrst, a short seller’s losses are potentially unlimited.