What is meant by margin trading and short selling

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Reference no: EM131279668

The following appeared as the opening paragraph in an article appearing in the Wall Street Journal (March 31, 2010): SHANGHAI-China will launch its long-awaited trial program for margin trading and short selling Wednesday, removing the last bit of uncertainty over its latest effort to introduce risky alternative investment tools to its huge but still immature stock market.

a. What is meant by "margin trading" and why is it viewed as a risky strategy?

b. What is "short selling" and why is it viewed as a risk strategy?

Reference no: EM131279668

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