Kortkjøp

Kortkjøp, often translated as "short purchase" or "short selling" in English, is a trading strategy employed in financial markets. It involves selling a security that the trader does not own, with the expectation that the price will fall. The trader then buys the same security back at the lower price, returning it to the lender, and profiting from the difference. This process is facilitated through borrowing the security from a broker.

The motivation behind kortkjøp is speculative. Traders engage in this strategy when they believe a particular asset is overvalued or likely to experience a price decline due to various factors such as poor company performance, negative market sentiment, or anticipated economic downturns. It is a bearish strategy, contrasting with a "long" position where a trader buys a security expecting its price to rise.

Kortkjøp carries significant risks. While the potential profit is theoretically unlimited if the price continues to rise after the short sale, the potential loss is also theoretically unlimited. If the price of the security increases instead of decreases, the short seller will incur a loss when they are forced to buy back the security at a higher price to cover their short position. Brokers often require margin accounts for short selling to mitigate these risks, which involves depositing collateral to cover potential losses. Regulatory bodies may also impose restrictions on short selling during periods of market volatility.