Short selling is a strategy where an investor sells shares they don't own — borrowed from a broker — hoping the price will drop so they can buy them back cheaper and profit from the difference.
The process: borrow shares from the broker, sell at the current market price, wait for the price to drop, buy back at the lower price, and return the shares to the broker. The difference is profit.
The advantage is the ability to profit in falling markets. The main risk is potentially unlimited losses, since a stock's price can theoretically rise infinitely.
In Bangladesh, short selling is permitted on stock exchanges but regulated by BSEC guidelines. Only specific shares are eligible for short selling.