Inside the mind of retail short sellers
Abstract
Abstract This paper exploits individual trading records from a large brokerage service to investigate the trading patterns of retail investors who take short positions in stocks using contracts for differences (CFDs). Their risk tolerance, as reported in MiFID II questionnaires, and their leverage usage indicate greater risk-seeking behavior. Short positions, compared to long positions, constitute larger portions of overall portfolios and are more highly leveraged. Yet, short sellers’ research activity does not suggest that they increase the amount of attention paid to stocks before taking short positions. Compared with other CFD traders, short sellers perform worse, and their profit variability is greater.
Fields of Study & Subjects
Consumer Market Behavior and Pricing
Consumer Retail Behavior Studies
Consumer Behavior in Brand Consumption and Identification
Publication details
- Journal / source
- Review of Derivatives Research
- Publisher
- Springer Science and Business Media LLC
- Volume
- 29
- Issue
- 1
- Publication date
- 23 February 2026
- Language
- EN