Inside the mind of retail short sellers

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 d