Short selling: Betting that a stock’s price will fall and why it can be risky
Instead of “buying low and selling high,” you’re trying to “sell high and buy low.”

Capital asset is a money term you need to understand. Here’s what it means.
A capital asset is an item that you own for investment or personal purposes, such as stocks, bonds or stamp collections. When you sell a capital asset, you earn a capital gain or a capital loss, depending on the price. Gains are taxed at a special rate, and losses can be used in many cases to reduce the amount that is taxed.
A capital asset can be used in a business sense as an asset investment that is anticipated to generate some kind of value over a specified period of time.
Capital assets have these characteristics:
For tax purposes, the classification of a capital asset differs. While the above classification holds true as a broad definition of a capital asset, what one company deems as such may not actually qualify under this classification for tax purposes.
Additionally, individuals and businesses can hold capital assets. For tax purposes, many types of property are considered capital assets, but the following holdings are excluded:
When you file your taxes, you must designate gains or losses incurred as the result of applicable capital assets as such.
If you have stocks that pay yearly dividends, your stocks are capital assets. The yearly payout that you receive is considered a capital gain and is taxed accordingly. Conversely, any losses are considered capital losses and may have some tax benefit for you.
Want to know what your tax responsibilities are for your latest capital asset gains? Learn more about how to calculate tax for these gains.