What trading strategy involves selling borrowed stock?

The trading strategy that involves selling borrowed stock is short selling.

In a short sale, an investor borrows shares—usually through a broker—and sells them at the current market price. The investor later aims to buy the shares back at a lower price, return them to the lender, and keep the difference after borrowing costs and fees.

The strategy reverses the usual order of investing. A conventional investor buys first and hopes to sell higher; a short seller sells first and hopes to buy lower. If the stock rises instead, the short seller may have to repurchase it at a loss. Because a stock can theoretically rise without limit, short-sale losses can be substantial.

Short selling is not the same as day trading or swing trading. Those describe holding periods or styles, whereas short selling describes a bearish position. A short seller may hold the position for minutes, days, or much longer, subject to broker rules, margin requirements, and share availability.