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The fundamentals on selling, closing, short selling trades on eToro
If you’re new to trading at eToro, you’re probably wondering what shorting or short selling, closing and selling a trade means. If you are then you’ll find all the answers in this article. Many times have been traders been struck with great losses due to the misunderstanding of the basic terminologies when using the platform. In this article, we will share a thorough guide and video explaining these terminologies – how they are used, how they can affect your decisions in trading, and how you can use them to win your trades with confidence.
(NOTE: Before we continue, we have to give a disclaimer that the trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. CFDs are complicated instruments that are never guaranteed to provide you supplemental earnings. In fact, Around 68% of all retail investors experienced a loss while trading CFDs. Make sure to keep this in mind before attempting to use the eToro platform yourself. All the information found on this website is not official trading advice and all practices shown are referenced for the use of the Demo account only.)
Trade Selling on eToro
The terms “selling”, “trade selling” or “selling a trade” actually holds the same meaning as “shorting a trade”. Shorting or selling trade is done whenever a holding is expected to have a price drop. As you short trade, you will be selling borrowed assets with the expectation that the price will drop which you can buy back later as you gain profit. Let’s say you initiate a short trade over a specific stock and it successfully went down by 10% from its current price – this means you will also gain a profit of 10%.
To sell or short trade on eToro, you will need to make an order. There are two easy ways on how you can perform an order at eToro. The first is by going to the particular stock or market which you want to sell and simply click the “trade” button located on the right side of the page.
The other alternative to sell or make a short trade would be to choose and click the “SELL” button out of the SELL/BUY tab on the page.
After choosing sell, you’ll be directed to this pop-up page.
A confirmation that you’re on the “SELL” page would be to check if you have the message “SELL [ASSET ABBREVIATION]” over the top section of the page (within the green box on the image). You can then move on to filling out the details required from the page and press the “Set Order” button once you have reviewed and verified your order. Depending on the parameters which you have set for your order, the sell order will be executed as soon as all conditions are met.
Additionally, you should bear in mind that selling a trade involves a small amount of fee. The specific fee is viewable below the order page. This is boxed in green in the attached image.
Short Selling on eToro
As mentioned earlier in this article, “short selling” on eToro is also the same as “selling a trade”. This means that a trader anticipates a price drop in the future and wants to make a profit out of the drop.
Closing your trade on eToro
On the eToro platform, you can only close trades that you presently own. As an example, let’s say you have bought or sold positions on TSLA (Tesla Motors Inc.) last month and have earned a good amount of earnings today. If you want to lock in your profits and close the trade, you will simply need to go to your portfolio, choose and click “TSLA” from your list of stocks. Afterwhich, you will be prompted to the next page where you can find the red “x” button on the right side of the page. As soon as you’ve clicked the “x” button – which is the close button, you’ll get a pop-up page to confirm the close. Press “Close Trade” on the confirmation pop-up page as a final step.
When closing a trade, always make sure that you’re on the right page. Others mistake “selling a trade” with “closing a trade” – which we all know are two different terminologies that can cause a catastrophic effect on your portfolio if executed wrongly.
Quick video on selling, closing and shorting a trade on eToro.
The video below provides you with a further explanation of what shorting and selling trade is and how it works. It comes with a quick walkthrough on how you can perform shorting and selling on an actual trade.
Now that you have a better understanding of shorting, selling, and closing a trade on eToro, you now have a better chance of gaining profits when trading. An eToro Demo Account can help you put these terminologies into practice. Sign up now and build your trading skills.
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Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
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