short selling

(FINANCE) borrowing securities for immediate sale, in anticipation of a sharp decline. Short selling requires strong nerves and excellent market timing; it also requires the ability to locate tranches of securities to borrow. If the short seller is correct, then she can buy back the securities at a much lower price, and lock in very high profits with very little initial investment. Closely related to the concept of a short position. However, a short position includes buying put options (for example), while a long position could include short selling put options. So they are not exactly the same. If a short sellers are wrong about the market, they are left hastily covering shorts, or buying the item they borrowed at a HIGHER price than they sold it for.