Short selling:


Borrowing a security then selling it at current prices with the understanding that it must later be bought back (hopefully at a lower price) and returned to the lender.


Good if the security price goes down. I borrow 100 shares of X, sell them at $15 a share, and get $1500. Later when the security price falls to $5 a share, I buy the 100 shares back (for only $500) and give them back to the lender. So my profit is $1000.


Bad if the security price goes up, because I then must purchase the shares I sold at a higher price than what I sold them at (and will suffer a loss).