Short Selling on eToro – How to Guide

Have you ever wondered how you can short an asset? Well, let’s find out using eToro. eToro allows you to buy and sell stocks and crypto assets in a few simple steps. And the best part is that you can buy/sell fractional shares. Instead of buying 1 stocks of Microsoft, you can buy 0.21 stocks. Or short it. Short selling comes at a price and you have to be aware of some things.

What is Short Selling?

Shorting or short selling is when an investor borrows a security and sells in the open market planning to buy it back later for less money (Investopedia). Short sellers profit when a price of an assets falls. Yes, it seems easy, but short selling comes at a price. You are working with a margin account since you are borrowing shares from your broker. That is why you need to have enough money in your account in order to maintain the short position. You can read more about short selling here. Before you start short selling, be familiar with all terms and conditions.

How to short sell on eToro?

Here are the steps for short selling:

• Find an asset that you want to trade in the search bar at the top

• Once you find an asset, click on Trade

• On the order panel, click on Sell at the top

• Set a market order (TRADE)

• Set the number of units you want to trade – in the example, I will trade 0.1 BTC. Below you will see the estimated margin, % of equity, and exposure.

• Set your Stop Loss and Take Profit

• Set your leverage. Short selling is already CFD trade, and higher leverage means higher risk.

• Click on Open trade. At the bottom you will see the overnight fee for that particular asset. Bitcoin has $1.67 daily fee and $5.02 weekend fee.

Read more on our blog:

• eToro vs Revolut
• eToro vs Coinbase