What is Short Selling , and how it Works

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Short selling is betting that a stock's price will go down. It involves selling something you don't own in the hope that you can buy it back later at a lower price, thus making a profit.

Short selling is a financial strategy where an investor tries to profit from the decline in the price of a security, such as stocks. In simple terms, here's how it works:

Borrowing:

The investor borrows shares of a stock from a broker. This is usually done by paying a small fee and agreeing to return the same number of shares at a later date.
Selling:

The investor immediately sells the borrowed shares on the open market at the current market price. This is done with the expectation that the stock's price will fall in the future.
Waiting for Price Decline:

The investor waits for the price of the stock to decrease.
Buying Back:

Once the stock's price has fallen as anticipated, the investor buys back the same number of shares from the market at the new, lower price.
Returning Shares:

The investor returns the borrowed shares to the broker.
Profit or Loss:

The profit (or loss) is the difference between the selling price and the buying price, minus any fees or costs involved in the process.