Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.6% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Beginner

Inside Pepperstone: Short selling flexibility with equity CFDs

Have you ever heard the ‘phrase up the stairs, down the elevator’? Markets tend to fall far faster than they rally. For some, this provides an enticing opportunity to look at short selling.

Have you ever heard the ‘phrase up the stairs, down the elevator’? Markets tend to fall far faster than they rally. For some, this provides an enticing opportunity to look at short selling.

Short selling essentially involves selling an equity or an Exchange-Traded fund (ETF) CFD in the market to open, and buying it back at any future point in time.

The purpose of short selling is to potentially profit in a declining market by capturing the price difference through selling an asset and buying it back later for less money.

Here’s a short video explaining short selling.


What is Shorting CFDs?

Pepperstone provides traders the flexibility to short sell an extensive range of global equity or ETF CFDs. This opens up two-way opportunities which allow traders to capture movements in any type of market conditions. The technical side of short selling is handled by Pepperstone and the trader focuses on the opportunity at hand.

Advantages of Short Selling

  • Opening the gates for the rest of us - CFDs are one of the most effective vehicles for non-institutional participants to trade a potential move lower in a share or an ETF price.
  • Two-way opportunity - Share CFDs work in a similar way as direct shares in terms of taking a view on price moves, just as you can with gold, crypto or SpotCrude
  • All our shares are available to short and there is limited prospect of recall, like you get with other brokers. Traders can even take short positions in an equity CFD on the day of an IPO.
  • Trading characteristics - Hold times on short positions tend to be of a shorter duration than that of long trades making it more suited to the active trader.
  • Full control - You can still utilise the full range of Pepperstone’s indicators, risk management tools and charting features, just as you would with any other strategy.

Learn more about trading CFDS

Here at Pepperstone, our customers love the product range along with the low cost to trade and the fact so many markets are open around the clock. Interested? Watch the more videos to learn or speak to our team about whether CFDs are right for you.