Short Futures
Selling a futures contract — agreeing to deliver (or cash settle) at expiry, and profiting as the price falls.
Being short futures means you have sold a futures contract and are obligated to deliver the underlying (or pay the cash settlement) at expiration. You profit when the futures price falls and lose when it rises.
Short futures require the same margin as long futures — both sides face symmetric risk in a standardized contract. Unlike shorting stocks, there is no borrow cost and no concept of a short squeeze in the margin sense (though sharp short-covering rallies certainly occur).
Short index futures are commonly used to hedge equity portfolio delta — a long equity manager sells ES to temporarily reduce market exposure without liquidating holdings.
On the desk
A trader sells 1 NQ contract at 19,500, expecting a pullback. NQ drops 200 points to 19,300. Gain = 200 × $20 = $4,000. If NQ rallied to 19,700 instead, the loss = 200 × $20 = $4,000.