How to Short Stocks UK

Trading stocks is one of the best ways to build wealth, but it’s also a strategy that comes with risks. One of the main concerns is that you may be wrong about your prediction – a stock’s price could increase instead of falling. That’s why some traders use the ability to short stocks as a hedge against their own portfolio.

Essentially, How to Short Stocks UK borrowing shares that you don’t own and immediately selling them in the hope that the share price will fall. This allows you to buy the shares back at a lower price, return them and pocket the difference (minus any loan interest). It’s important to remember that this is an extremely risky trade, and novice investors should probably stay away from it altogether.

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In the UK, anyone with a share dealing account can short shares, although hedge funds are the main users. The FCA’s UK Short Selling RegulationLink is external requires investors to notify the market when they have a net short position in shares that represents 0.2% or more of total issued share capital, and at every time this increases above that threshold.

Selecting the best UK broker for short selling can help you take full advantage of this strategy, and realize your investment goals. Benzinga has reviewed the top brokers for UK traders and ranked them based on their fees, platforms, features and customer support. Read on for our full reviews, and select the brokerage that best suits your needs.