Why would someone sell a stock short?

Many people buy stocks when they are bullish, but short selling also allows them to take a position when they believe a stock price may decrease in the future. If someone is bearish and believes a stock price will only decrease, they may want to sell shares now, and buy them back at a discount later, thereby creating a profit. This is called a directional short. People also sell short to facilitate hedging and arbitrage, but we will focus on directional shorts.  more