in simple terms shorting is when you want the stock to go down, wat happens is your broker has people who own the shares what you do is you basically borrow the shares (lets say company XYZ at 10$, 1000shares), you receive 10,000$ cash there is no time limit for how long you can keep the shares i think you pay some interest and it takes from your margin so you have to be careful for margin calls. Lets say the next day the stock rises to 11$ if you were to return the shares you would have to pay 11,000$ so you lose 1000, if however it goes to 9$ then you only have to pay back 9000$ so you gain 1000$ Shorting is risky if for example you short a 10$ share and it goes to 30$ not only have you lost the 10k$ investmenet you lost a whopping 20k$ -200% returns. coz of the extra risk different stocks r counted as a larger part of ure margin depending on its volatility by ure broker, i think its impossible to short anything below 1or 2$ so no penny stocks either.