Borrowing shares from your brokerage to sell them immediately, with the intention of buying them back later at a lower price. The profit is the difference between what you sold them for and what you pay to buy them back. Short selling is riskier than regular investing because losses can be unlimited if the price keeps rising.
You believe a stock trading at $100 is overpriced. You short sell 10 shares by borrowing them and selling immediately for $1,000. If the price falls to $70, you buy back the 10 shares for $700, keeping $300 profit (minus fees and interest on the loan).
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