Short selling is a trading strategy that involves an investor borrowing an asset and immediately selling it in the hopes of repurchasing it at a lower price. Put simply, short sellers take advantage of falling markets, profiting from the difference between the purchase and sale prices when they cover their position. This activity provides added liquidity to the markets and helps to balance supply and demand. It has become an important part of any market-maker’s toolkit – used by investors large and small to hedge against risk and capture profits even in downtrends.