Short Positions

Definition ∞ Short Positions represent an investment strategy where a trader speculates on a decline in an asset’s price. This involves borrowing an asset, selling it, and then repurchasing it later at a lower price to return to the lender, profiting from the price difference. In crypto markets, this can be executed through derivatives like futures or options, or via margin trading.
Context ∞ Short positions are regularly discussed in crypto news, especially during periods of market downturn or heightened volatility. Large volumes of short liquidations can trigger rapid price increases, a phenomenon known as a short squeeze. Understanding the prevalence and impact of short positions provides insight into market sentiment and potential price movements for digital assets.