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short selling

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The practice of selling a security or commodity that you do not own. You borrow the commodity or security from a third party (usually a broker) and immediately sell it to a buyer. You then buy identical securities back at a later date, to return to the lender. This is a speculative investment, made when you believe the price of the security is going to fall and therefore you will make a profit. Find out more about short selling on our hedge funds webpage.