In the stock market, betting on the decline of a security. It involves selling assets, usually financial securities, that have been borrowed from a third party (usually a broker) with the intention of buying them back at a later date and at a lower price than the previous sale price to return them to the third party. When the shares have fallen, the investor repurchases them and returns them to the lender, profiting from the difference between the sale and repurchase prices. In contrast, investors who follow a saving strategy suffer from the decline in the value.
« Back to Glossary IndexShort selling
« Back to Glossary Index