Short selling and closing on eToro – What’s the difference?

What is Short Selling on eToro?

Short selling, also known as “selling a trade,” is a strategy used when a trader expects a stock’s price to drop. By short selling, a trader sells borrowed assets with the hope of buying them back at a lower price later, thus increasing success. 💸

How to Short Sell on eToro

1. Go to the specific stock or market you want to short sell and click the “Trade” button on the right side of the page.
2. Select the “SELL” button from the SELL/BUY tab on the page.
3. Ensure you are on the “SELL” page by checking for the “SELL [ASSET]” message at the top of the page.
4. Fill out the required details and click “Set Order” after reviewing and verifying your order.
5. The sell order will be executed once all specified conditions are met.

💡 Remember that short selling involves a small fee, which is visible below the order page.

After clicking trade, you’ll be directed to this pop-up page.

What is Selling a Trade on eToro?

As previously mentioned, “selling a trade” is synonymous with “short selling.” These terms describe the process of selling an asset with the expectation that its price will decrease, allowing you to buy it back at a lower cost and achieving success. 📉

What is Trade Closing on eToro?

Closing a trade refers to exiting a position you currently hold. To lock in your success and close the trade, you’ll need to follow these steps:

How to Close a Trade on eToro

1. Go to your portfolio and click on the stock you want to close (e.g., TSLA).
2. Find the red “x” button on the right side of the page and click it.
3. A pop-up page will appear for confirmation. Click “Close Trade” to finalize the process.

🚨 Be cautious not to confuse “selling a trade” with “closing a trade,” as mixing these terms can have detrimental effects on your portfolio.

Pros and Cons of Short Selling, Trade Closing, and Selling a Trade

Pros

• Short selling enables traders to achieve success from falling stock prices.
• Closing a trade allows you to lock in success and minimize risks.
• Understanding these concepts can help you create a diverse trading strategy.

Cons

• Short selling involves borrowing assets, which may incur fees and additional risks.
• Closing a trade prematurely might cause you to miss out on potential successes.
• Mistaking these terms can lead to costly errors in your trading strategy.

🎓Practice Makes Perfect: Using an eToro Demo Account

Now that you understand the differences between short selling, trade closing, and selling a trade on eToro, you’re ready to put your newfound knowledge into practice. An eToro Demo Account can help you apply these concepts and refine your trading skills. Sign up today and level up your trading game! 🚀

💡 Final Thoughts

Mastering short selling, trade closing, and selling a trade on eToro is essential for navigating the platform effectively and maximizing your successes. By understanding these concepts and practicing them on a demo account, you’ll be better equipped to execute successful trades and minimize risks. Happy trading! 😃