What is Short-Selling?

Stock Market Terms explained as simple as possible

QUICK ANSWER

Short-selling is the process of borrowing shares to sell them to the market to buy them back later for a lower price for a profit.

Your broker offers you shares that you can borrow and sell at the market. You do this because you are a bear and you want prices to fall so that you can buy back the shares at a lower price for a profit. This entire process for you as a trader is seamless (if your broker has shares to short of course). You sell them like you would sell shares that you already own.

SOURCE: Wikipedia

Do you want to be a successful stock trader?

Discover our FREE and SIMPLE stock trading guide!
Get Started