BEYOND THE CHART · CHAPTER 03

Short Selling, Margin & Leverage

The learner can explain what short selling is, why it involves borrowing, what short interest indicates, how margin works, what leverage does to gains and losses, what margin calls and forced liquidation are, why short squeezes occur, and how asymmetric risk separates short and leveraged positions from ordinary cash buying. The chapter remains educational and does not recommend short selling or leverage.