Here's a simple explanation of short selling: Borrowing: You borrow shares of a stock from someone who owns them (usually through your brokerage). Selling: You sell those borrowed shares at the current market price, hoping the price will go down. Waiting: You wait for the stock price to drop. Buying Back: When the price has dropped, you buy the same number of shares back at the lower price. Returning: You return the shares you borrowed to the original owner. Profit or Loss: Your profit is the difference between the price you sold the shares for and the lower price you bought them back at. If the stock price goes up instead of down, you lose money because you’ll have to buy the shares back at a higher price. In essence, short selling is a way to make money when you think a stock's price will go down. If the price goes up instead, you could lose money.

Answer given by Shubhamm Sir at 17-Sep-2024 12:55 PM