Short selling, or ‘shorting’, is a high-risk investment strategy which involves selling a security (such as a certain number of shares) that the investor doesn’t own, in the belief that its value is going to fall. The investor borrows the shares from a third party (typically a broker) and sells them, only to buy an identical number of shares later (for less money) and return them to the lender, thereby making a profit. However, if the value of the shares increases instead, the investor may lose a lot of money.
The opposite of short selling is called ‘long selling’ or ‘going long’ and is the more traditional investment strategy. It involves an investor simply buying an asset in the expectation that its price or value will rise.