What is Short?

Short means you sell first. You make money if the price falls, and lose money if it rises. Later, you buy back to finish the trade. This feels strange at first: how can you sell something you do not have? In the markets this book discusses (futures and CFDs), a short position is simply a contract that gains when the price falls. You never have to own the gold first. The exchange or broker records that you have "sold" a certain amount, and you finish the trade by buying the same amount back.