I am no financial expert, but this is my understanding. You pay someone to borrow their stock for a certain period of time. You immediately sell the stock in the hope that the value will decrease. You can then buy back the stock at the lower price and return it to the person you borrowed it from. It is very risky, because there is no limit to how much you can lose. If the stock price goes way up, you have to pay it in order to return it to the person you borrowed it from.