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Investment
Short Selling
Borrowing shares, selling them immediately, and buying them back later at a lower price to make a profit.
Short selling lets investors profit from falling prices. However, losses can be unlimited if the price rises instead. It is considered more advanced and riskier than simply buying stocks.
It's betting that a stock will go down — you sell high first, then buy low later.
Real world: A trader thinks a company is overvalued. They borrow 100 shares and sell them at £100 each. If the price falls to £70, they buy them back, return the shares, and pocket £30 profit per share.
💡 Short selling is how smart traders make money when the market is falling — but it can be extremely dangerous.