Jeff Randall explains a short sale:
Put simply: I know that you want to buy 100 shares in Jayar Junk. The shares are trading at £10 each. We strike a deal at that price, and I promise to deliver them in one week\’s time. At this point, I still don\’t own any Jayar Junk. No matter, my buddies at the Rumour Mill are about to go to work.
Through a series of postings on dodgy websites, anonymous emails and loose talk in dealers\’ watering holes, we spread the story that Jayar Junk is running out of readies. Very soon the shares start falling, to £9, £8, £7. In angst-ridden markets, there is no bottom. When they hit £5, we buy 100.
Bingo! You are contracted to take them from me for a total of £1,000. My cost is just £500. I double my money and you are ripped off. It\’s no more complicated than that.
That looks more like a future to me than a short sale.
A short is where you borrow the stock and sell it, then buying it back at the new lower price and return it to the original owner, no?