With a short position an investor bets on decreasing security prices. Originally, the concept of short selling described a situation in which an investor sells securities that he does not yet own, with the intention of buying them more cheaply at the time of delivery. The delivery obligation was met by lending the securities in question.

Today, the holding securities whose price will increase when the underlying instrument declines is referred to as a short position, e.g. by holding put options and warrants, certificates or inverse ETPs.

If a short position is depreciated, it is also called closing a position.

The opposite of a short position is a long position.