Heard on the Street

Longer Odds for Short-Selling Success

May 15, 2013 4:35 p.m. ET

Most investors know that shorting a stock, or betting it will fall in value, entails the chance of huge losses. But knowing that is nothing like seeing it in action.

The ramp higher in Tesla shares in the days since the electric-car maker reported a first-quarter profit has served as a vivid reminder of just how dangerous a game shorting stocks can be. It may also signal a shift to a kind of market environment that can prove...

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