What is “Short-Selling”

Question

I just cannot, for the life of me, understand how you make a profit by it.

In: Economics

Answer 1

I borrow 10 apples from you because the price of apples is $1 an apple.

I sell your apples for $10.

The price of apples drops to $0.50 per apple.

I buy 10 new apples for $5.

I return to you, 10 apples.

I have made $5 by short selling apples.