What does shorting mean?

Shorting, also known as short selling, is a strategy used in finance where an investor sells a financial instrument that they do not actually own, with the intention of buying it back at a lower price in the future. This strategy is typically used when an investor believes that the price of the financial instrument will decrease, allowing them to profit from the price difference. Shorting can be done with stocks, bonds, commodities, or other financial instruments, and it is considered a high-risk strategy because the potential losses are unlimited if the price of the instrument rises instead of falls. Shorting is often used by professional investors and speculators to capitalize on downward market trends or specific company weaknesses. It is also a way for investors to hedge their long positions and protect themselves from potential losses in a declining market. Shorting can have a significant impact on the market and is subject to various regulations and restrictions.