Also found in: Thesaurus, Legal, Financial, Wikipedia.
Related to short selling: hedging
(Stock Exchange) finance the practice of selling commodities, securities, currencies, etc that one does not have in the expectation that falling prices will enable one to buy them in at a profit before they have to be delivered
The practice of selling shares that one does not own but that one has an agreement to purchase in the future. For example, if a hedge fund believes that the share price of a company is likely to fall it may agree with a broker to borrow 100 shares of that company today with the understanding that it will pay the market price for then in 30 days time. The hedge fund then sells these 100 borrowed shares at the current price with the expectation that when the 30-day period has expired it will pay less for them than it has received for selling them today.