What is the short selling technique?

A short sell is a stock trading strategy that involves selling a borrowed equity (shares or stock) that the seller doesn't own.

Short sell traders hope to repurchase the security at a lower-priced point before they have to return it, giving them an opportunity for profit.

The primary motive of shorting securities is as part of the speculation about potential price reductions in the future.

The following points are necessary pre-conditions for executing this trade:

1. Someone must lend you their shares, which means there needs to be someone who owns the same share as you and agrees to lend it out but does not want to sell it, so they "elect" instead (transaction is usually subject to margin regulations) to lend it out. In other words, if you want to short a stock, you have to find someone who has the shares that you are looking for and who is willing to lend them out.
2. The security price must be higher than the lowest price at which you can borrow the security. This is why there's no way to short security that isn't on the market because there's no way to trade the shares at any price below zero.
3. There must be someone who will buy the stock from you when you want to cover your short position (i.e., "sell") -again, someone that is looking to raise cash that can go into something else or simply increase the cash in their portfolio.

It is possible to short sell with any regulated stock (i.e., Nasdaq, NYSE, OTCBB) in bulk since most of these markets allow institutions and individuals to short a large block of shares without worrying about borrowing availability or high broker fees.

For smaller stocks that are traded short sell, a stock trading strategy involves selling a borrowed equity (shares or stock) that the seller doesn't own. Short sell traders hope to repurchase the security at a lower-priced point before they have to return it, giving them an opportunity for profit.