What can be expected when engaging in a short position?

Engaging in a short position entails selling an asset that you do not currently own, with the expectation that its value will decline. This strategy is based on the assumption that you will be able to buy back the asset later at a lower price, allowing you to pocket the difference as profit.

In a short sale, an investor borrows shares of a stock and sells them immediately in hopes of buying them back at a reduced price. If the asset's price indeed decreases, the investor can purchase the shares at this lower rate, return them to the lender, and capture the profit made from the sale. This is why anticipating that the asset's value will decrease is integral to the strategy of short selling.

On the other hand, profiting from an increase in asset value, guaranteeing appreciation, or avoiding risk are contrary to the principles of short selling. In fact, if the asset's value increases instead of decreasing, it can lead to significant losses for the investor, underlining the inherent risks involved in short selling.