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Short Selling Stock Overview and Examples Quiz

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1. What is the primary reason investors engage in short selling?

2. Which of the following best describes short selling?

3. What is required for an investor to begin short selling a stock?

4. Which scenario would be considered a successful outcome for a short sale?

5. Which term refers to the risk of unlimited losses in short selling?

6. What happens in a 'short squeeze'?

7. What is a 'covered short' position?

8. Which factor can increase the cost of short selling?

9. Why might an investor choose to short sell in a bear market?

10. What is a margin call in the context of short selling?