Short selling, a strategy that bets that a stock’s price will fall, is a high-risk strategy that can destroy professional funds. Traders borrow shares from their brokerage and repurchase them later at a lower price, returning the difference as profit. If you sell 100 shares at $50 each, then buy them back at $40, you pocket $1,000 minus any applicable trading and borrowing fees. Short selling is legal and recognized as a legitimate trading strategy that contributes to efficient price discovery across public equity markets. However, it requires a large amount of upfront deposits and a large percentage of margin interest to be kept in the account. If the stock price rises and your account equity drops below this threshold, your broker will issue a margin call requiring additional cash immediately. Short sellers have no ceiling on losses, as their broker can force them to deposit additional cash or liquidate their position at any time.