A: Short selling is the opposite of buying.

If you buy a stock, hopefully at some stage you can sell it at a higher price to make a profit.

With short selling, you sell the stock first. Hopefully, you then buy the stock back at a lower price to make a profit.

As you can’t sell something that you don’t own, a short seller needs to be able to borrow the stock from another party. Typically, a short seller borrows the stock from a financial institution and secures the loan of the stock with cash. The stock is then sold into the market, with the short seller receiving cash, and delivering the borrowed stock to the buyer. When it comes time to close the short position, the transaction is reversed. The short seller buys the stock back in the market, and then delivers that stock to the institution that he borrowed it from.