Algorithmic Short Selling with Python: Strategies, signals, and risk management techniques for profitable short trades - Softcover

Laurent Bernut

Softcover

ISBN 10: 1806025930 ISBN 13: 9781806025930

Publisher: Packt Publishing, 2026

Synopsis

Master algorithmic short selling with Python by learning practical strategies, coding trading signals, and applying robust risk management to generate alpha in any market condition.

Key Features

• Build and test algorithmic short-selling strategies in Python
• Apply advanced trade execution, position sizing, and risk controls
• Harness regime detection, pairs trading, and portfolio management
• Purchase of the print or Kindle book includes a free PDF eBook

Book Description

Short selling is often seen as one of the toughest sides of trading, yet it offers unique opportunities for alpha generation and risk control. Algorithmic Short Selling with Python – 2nd Edition is a complete guide to mastering systematic short-side trading, combining financial theory, behavioral insights, and hands-on Python code.

You’ll begin by challenging common myths about short selling and understanding its unique psychology and risks. From there, the book introduces algorithmic strategies including relative long/short, regime detection, pairs trading, and trading edge formulas. You’ll learn how to code and test these strategies in Python, while also mastering stop-loss science, exit optimization, and volatility-based position sizing.

Later chapters cover portfolio construction, sector and factor exposures, mandate design, and execution techniques, ensuring your strategies integrate seamlessly into broader investment workflows. With coverage extending to equities, derivatives, and even Bitcoin shorts, this edition provides a practical, end-to-end framework for systematic short selling.

By the end, you’ll be able to design, test, and implement robust short-selling strategies, manage risk effectively, and enhance portfolio performance across market conditions.

What you will learn

• Understand the unique psychology and risks of short-side trading
• Code long, short and pairs trading strategies in Python
• Apply regime detection methods to define market states
• Master stop-loss and exit techniques to protect and compound returns
• Implement volatility-based sizing and advanced position management
• Evaluate risk with metrics like Sharpe, Grit, and robustness scores
• Construct long/short portfolios with exposure and mandate design
• Extend strategies to Bitcoin and global cross-asset short selling

Who this book is for

This book is for quantitative traders, portfolio managers, algorithmic trading developers, and advanced retail traders who want to master the short side using Python. A working knowledge of Python and basic trading concepts is assumed. Readers will gain not just coding skills, but also the strategic and risk management frameworks needed to build profitable short strategies.

Table of Contents

1. The Stock Market Game
2. 10 Classic Myths About Short-Selling
3. Long/Short Methodologies: Absolute and Relative
4. Regime Definition
5. The Trading Edge is a Number, and Here is the Formula
6. Position Sizing: Money is Made in the Money Management Module
7. Refining the Investment UniverseInvestment Universe
8. The Long/Short Toolbox
9. Risk Management & Asset Allocation
10. Putting It All Together: Screening

About this title

About the Author

Laurent Bernut has 2 decades of experience in alternative investment space. After the US CPA, he compiled financial statements in Japanese and English for a Tokyo Stock Exchange-listed corporation. After serving as an analyst in two Tokyo-based hedge funds, he joined Fidelity Investments Japan as a dedicated quantitative short-seller. Laurent has built numerous portfolio management systems and developed several quantitative models across various platforms. He currently writes and runs algorithmic strategies and is an undisputed authority on short selling on Quora, where he was nominated top writer for 2017, 2018, and 2019.

Edition details

• Publisher: Packt Publishing
• Publication date: 2026
• Language: English
• ISBN 10: 1806025930
• ISBN 13: 9781806025930
• Binding: Paperback
• Edition number: 2
• Number of pages: 329