Short selling is the selling of a movie stock that the you don't own. More specifically, a short sale is the sale of a security that isn't owned by the seller, but that is promised to be delivered. That may sound confusing, but it's actually a simple concept. You're "selling" that stock, we'll say 100 shares at $30. Sooner or later you must closer or "cover" the short by buying back the same number of shares. If the price drops, you can buy back the stock at the lower price and make a profit on the difference. Say you "cover" those 100 shares when the price is $20. You then make $10 for each share you "cover". If the price of the stock rises, you have to buy it back at the higher price, and you lose money.