short sale
Investment Dictionary -> short saleA Short Sale is a sale of stock or commodity, with the expectations that its price will go down. It works like this. Investor borrows stock of company ABC while the market price is $500 per share and then sells the stock right away at $500 per share. If the price of the stock goes down to $400, the investor can buy back the same amount of shares he/she sold and return them to the company he/she borrowed them from. The difference between the price he sold the stock for and the price he bought the stock for is the investors profit.