Short selling on the stock market means a trader sells a stock that he/she doesn’t own. When you sell one share your broker will lend you the security. The shares are sold and the proceeds are credited to your account. Sooner or later, you must close the short position by buying back the same number of shares to give them back to your broker. If the price drops, you can buy the share back at a lower price and make a profit on the difference. If the stock price rises, you must buy them back at a higher price and you lose money. This is the principle of contracts for difference (CFDs).