All About Short Selling: The Easy Way to Get Started

All About Short Selling by Tom Taulli is a concise, practical handbook that demystifies one of trading’s most misunderstood skills: profiting when prices fall. Written in plain English, the book walks you through why and when to short, how to execute safely with margin, and how to protect yourself from the unique risks—like squeezes, buy-ins, and unlimited loss profiles—that can blindside the unprepared.

Taulli starts with the core mechanics (borrowing, locating shares, order types, margin rules) before moving into the real costs of shorting: borrow fees, dividends owed, bid-ask slippage, and interest. From there, he builds a complete analysis toolkit. You get fundamentals tailored to shorts (quality of earnings, cash-flow red flags, weak balance sheets), basic accounting for short sellers, and the key technical patterns that often precede breakdowns—plus how to detect regime changes and bear markets.

The strategy chapters are where this guide pays for itself. You’ll learn trade construction, timing, risk management, and how to use options for defined-risk shorts. Dedicated sections cover special situations, inverted ETFs, shorting commodities, and how to navigate events that can rip a short—M&A, FDA decisions, and crowded trades. Taulli also addresses the tax and compliance realities (wash sales, constructive sales, dividends on borrow), so you aren’t surprised at filing time.

Whether you’re adding shorts as a hedge to steady a long portfolio or building a repeatable short-alpha process, this is a smart, step-by-step field guide that keeps you focused on process, probability, and downside control.

✅ What You’ll Learn:

• How short selling works (borrows, margin, order routing)
• True costs & risks (interest, borrow, dividends, squeezes, buy-ins)
• Fundamental & accounting red flags tailored to shorts
• Technical setups for breakdowns and bear-market confirmation
• Options-based shorting for defined risk
• Hedging with inverse ETFs and special-situation shorts

💡 Key Benefits:

• Clear, beginner-friendly path to start shorting safely
• Frameworks to avoid squeezes and event risk
• Checklists for fundamental, technical, and cash-flow cracks
• Practical trade construction and risk management rules
• Tax & compliance essentials specific to short sellers

👤 Who This Book Is For:

• Long-only investors adding protective hedges
• Active traders seeking short-alpha playbooks
• Portfolio managers needing bear-market tactics
• Analysts learning accounting & forensic cues for shorts

📚 Table of Contents:

• Ch.1 What Is Short Selling & How Can It Help?
• Ch.2 Characteristics of Short Selling
• Ch.3 Risks and Costs of Short Selling
• Ch.4 Fundamental Analysis
• Ch.5 Basic Accounting for Short Sellers
• Ch.6 Analyzing the Balance Sheet
• Ch.7 The Income Statement
• Ch.8 Statement of Cash Flows
• Ch.9 Technical Analysis
• Ch.10 Detecting Bear Markets
• Ch.11 Trading Strategies
• Ch.12 Shorting with Options
• Ch.13 Shorting Commodities
• Ch.14 Shorting with Mutual Funds, Hedge Funds & Inverted ETFs
• Ch.15 Special Situation Shorts
• Ch.16 Risk Management