Forex Dictionary Terms


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Definition – What does Shorting mean?

Shorting is a forex trading practice where the trader takes up a position that will profit from a fall in the value of a particular currency.

Shorting is also referred to as “being short” a currency, short selling, going short and taking a short position.

ForexTerms explains Shorting

Because currencies are traded in pairs, shorting in forex means that a trader sells the base currency and buys the quote currency. In this case, a trader is short the base currency, so any fall in the value of the base currency against the quote currency means a profit for the trader. A forex trader can short a currency using one currency pair, or he can take up a broad short position by selling all pairs with the target currency as a base currency and buying any pairs where it is the quote currency.

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