Short-Selling

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As a non-economist and illiterate financial marketer, I recently stumbled upon this CNN Business headline article. The thing that interested me was to learn a financial term “short-selling”.

The article describes the short-selling, in non financial-terms, this way:

Let’s say there’s a football game on Friday night, and your friend has a ticket. But you suspect the price of tickets may fall due to lack of demand on game day. So you borrow the ticket from your friend, for a small fee, and promise to have it back to them in time for kickoff. Right away, you sell the ticket you borrowed for 50 bucks, betting that by game day the cost of a ticket will be less than $50. And sure enough, bad weather keeps people at home and the stadium starts slashing prices. You buy a ticket for $30, give it to your friend, and pocket the $20 difference (minus whatever fee you paid your friend for the privilege of borrowing.)

Now, it makes sense, even for ordinary people, what short-selling is all about.