This post discusses about “short selling” on eToro. Take note: This is not the same as closing a position on the platform. Clicking on the "Sell" function of the platform will open a new "short" position and not necessarily selling an asset from your portfolio.
For starters: Short selling is advantageous and commonly done when the price of an asset is going down. Via this method, you are opening a position in which the value will go up as the underlying asset's value declines. On eToro, you can do short selling via CFDs or contracts for difference. As the name implies, you and eToro agree to a contract to settle the difference when the transaction has ended.
If you want to open a "Sell" position on eToro, follow these basic steps:
- Open the eToro platform and select the asset that you want to invest on.
- Click on the "Trade" button.
- Click the "Sell" tab.
- Enter the amount that you'd like to invest.
- Configure the stop loss, leverage and take profit according to your preferences.
- Click on the "Open Trade" button to execute the order.
After the order has been executed, the position will make a profit if the instrument's value goes down. For more information, you can click here.