Short selling in Islamic finance
Short selling is not new. It dates from 1609 when Dutch trader Isaac Le Maire performed the first short. His outrageous act led to the first stock exchange regulations: a ban on short selling, revoked in 1611.
Today short selling is one of the most popular techniques used by hedge funds to protect and, hopefully, increase their investors’ money. The majority of shorting is a way to ‘hedge’ a long position on a particular stock.
The idea is that a short seller can profit from a stock price going down by borrowing a security and selling it, expecting it will be cheaper to repurchase at some point in the future. When the seller believes the time is right, or when the lender recalls the shares, the seller
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