A short position is the sale of share(s) you do not own. Traders who sell short believe the share price will decrease in value, as opposed to increase in value. If the price drops, you can buy the share back at the lower price and make a profit.
If the price of the outcome rises and you buy it back later at a higher price, or the share settles at 100, you will incur a loss.
Please note: Shorting is an advanced trading technique and must be enabled by navigating to the Bet Preferences menu within the Sporttrade app’s Account tab.
Example
It’s late in a PGA tournament, and you believe the current tournament leader and odds-on favorite to win it all will ultimately fail to win the event.
To capitalize on this, you enter into a short position by selling the player’s To Win outcome, which is currently trading at $30.00.
As anticipated, the favorite’s chances diminish as their play falters late in the final round. With the share price declining, your profit increases because you already sold the share at a higher price.
Near the end of the tournament, the share price drops to $12.00. At this point, you have an unrealized profit of $18.00.
To exit your position, you can:
Buy back the share at $12.00, locking in an $18.00 profit, or
Hold the position and, if the player ultimately does not win, the share settles at $0, resulting in a $30.00 profit
In either case, the profit you collect is the difference between the price you sold the initial share for and the price you either buy it back for or the final settlement price.
*Note: Exchange wagering is currently unavailable in Iowa.
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