What is the intention behind 'short selling'?

The intention behind short selling is to sell borrowed securities with the expectation that their price will decrease in the future. In this strategy, an investor borrows shares from a broker and sells them on the market, hoping to repurchase them later at a lower price. This can allow the investor to profit from the difference between the sale price and the repurchase price once the stock has declined in value.

This approach relies on the belief that the market will move in a way that is favorable to the investor. If the price does decrease, the investor can buy back the shares at the lower price, return them to the broker, and keep the difference as profit. Conversely, if the price rises, the investor faces potentially unlimited losses, as there is no cap on how high a stock price can go.

In summary, the correct answer effectively captures the fundamental strategy behind short selling, which is to leverage borrowed securities in anticipation of a decline in price to achieve financial gain.