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How does Shorting work?

Manage losing positions with Cryptohopper's Short and Trailing Stop-Short feature, an alternative to traditional stop-loss methods.

Pete Darby avatar
Written by Pete Darby
Updated over a week ago

If you have a losing position, Cryptohopper provides a solution using the Short and Trailing Stop-Short feature. This feature offers an alternative for traders seeking alternatives to traditional stop-loss methods.

Understanding Shorting

Shorting involves profiting from the decline in the price of a cryptocurrency. However, Cryptohopper's approach to shorting differs from how it's done on crypto exchanges.

Instead of borrowing a cryptocurrency to sell it with the aim of buying it back at a lower price, Cryptohopper's shorting mechanism functions more like a buyback function.

How Shorting Works

If you already made significant losses in a position, you can initiate a Short with Cryptohopper. This action prompts your trading bot to sell the position. Then, when the price reaches its lowest point, you can close your short position and repurchase the cryptocurrency with reserved funds from your sold position.

By using the Short and Trailing Stop-Short feature, you can effectively manage losing positions and potentially profit from market downturns.

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