shorting stocks UK is an investment strategy that involves borrowing and selling shares you do not own in the expectation that their price will fall. When that happens, you repurchase the shares at a lower price, return them to your broker and keep the profit difference (minus any loan interest).

UK Spread Betting Platforms: A Guide for Beginners

The main risk is that prices can go up rather than down. This can cause a’short squeeze’ where the flood of buy orders pushes prices higher and eats into the profits of short sellers. The good news is that share prices have a finite distance to travel from their high to zero, meaning they cannot rise infinitely – otherwise you would run out of stock to sell (unless you were holding unlimited shares in the company you’re shorting).

A common method of trading stocks that aren’t available to short in the UK is via spread betting. You bet on whether the market will go up or down, with profits typically tax-free*.

On 16 March 2020, ESMA published a decision to temporarily require holders of net short positions in certain shares traded on EU regulated markets to notify the relevant national competent authority when that position exceeds 0.1% of the outstanding shares of the company (instead of the previous reporting threshold of 0.2%). The private notification and public disclosure requirement apply to all UK-listed shares, except those excluded by the list of exempted shares.

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