What is the meaning of "short sell?"
A) Buy shares from a brokerage firm and enter into a forward transaction to sell the shares at today's price on a future date.
B) Sell the shares at today's price to an investor and enter into an option agreement to buy the shares back in the near future.
C) Buy shares from one brokerage firm and sell the shares to another brokerage firm with a view to make quick money.
D) Borrow shares from a brokerage and sell the shares at today's price with the intention to repay the borrowed stock they sold at some future time when the stock is trading for a lower price.

Question

Quizplus · Accepted Answer

Short selling is the practice of borrowing shares from a brokerage and selling them at today's price with the intention to repay the borrowed stock they sold at some future time when the stock is trading for a lower price. The investor hopes to profit from the difference in price between the sale price and the lower purchase price.

What Is the Meaning of "Short Sell