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The shares are sold and the proceeds are credited to your account. Sooner or later, you must “close” the short by buying back the same number of shares (called covering) and returning them to your broker.
Recognizing the important aspects of short selling allows traders to better manage potentially unlimited losses due to market risk, as wellas other perils like dividends and corporate actions.
Short selling is a sale of security that is not owned by a seller, or that the seller has borrowed.
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