When a futures trader believes that the price of an asset is likely to fall, it makes sense to consider entering into a short position. With this approach, a futures trader will effectively ‘sell’ an asset at one price and then buy it back from the broker at a later date. If the asset price falls during the time the position is held, the trader profits. The difference between the initial sale price and the later purchase price marks the total profit or loss in the position. Short positions are generally based on a bearish outlook that supports an argument for lower prices at a later date.