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(FINANCE) a situation in which an investor owns financial instruments (shares, bonds, financial [derivatives], etc.) that will make the most money IF some other thing declines in value. Therefore, one always has to take a short position on something in particular. A short position on gold means the investor expects gold to decline in value [in the near future], and has bought various things to make money if it does. Some ways to take a short position on X include: (1) buying a put option on X (2) writing a call option on X (3) borrowing X and selling it (shorting a stock) #3 is the classical way to take a short position. It was dangerous because a skillful trader could [squeeze the shorts] using a corner.
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