In contrast to buying, selling refers to liquidating an asset the trader has previously bought in exchange for cash. Investors typically sell assets to take a profit or cap further losses. Closing a long position actually means that investors is ‘selling’.
Selling is the process of converting a non-liquid asset (such as stocks) into a liquid asset (such as cash) through the open market.
In investment research, analysts tend to slap a ‘Sell’ rating on a certain stock as they believe these shares will underperform the market and there is a risk of a decline. Contrary to ‘Sell’ ratings, analysts also have at their disposal Hold/Neutral and Buy ratings.
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