Short selling enables traders to profit in a down market or protect existing investments. Find out how and why short selling can become a key part of a balanced trading strategy.

The shares are sold and the proceeds are credited to your account. Sooner or later, you must "close" the short by buying back the same number of shares (called covering) and returning them to your broker. If the price drops, you can buy back the stock at the lower price and make a profit on the difference.