Short selling (stocks)

"Short selling" of stocks is a way to make money from a decline in price of a stock over time.

• In other words, if the investor thinks a stock will lose value over time, the investor can make money via a "short sale"
• the concept is: "sell to open / buy to close"

1. Borrow a stock from someone else
   1. usually from a stock broker
2. "Sell to open"
   1. = Sell the stock that you have borrowed at current prices
3. "Buy to close"
   1. = Buying the stock back later at a cheaper price (hopefully)

• Steps 1. borrow stock and sell at current price 2. buy back at certain date at present value 3. pocket difference