Open a margin account with a brokerage that allows short selling
Ensure you meet the broker’s minimum equity and margin requirements
Identify a stock you believe will decline in price
Check that the stock is available to borrow
Place a short sale order through your broker
Borrow the shares from the broker or lending pool
Sell the borrowed shares in the market
Wait for the stock price to fall
Buy back the same number of shares at the lower price
Return the borrowed shares to the lender
Keep the difference between the sell price and buyback price, minus fees and interest
Monitor margin requirements throughout the trade
Close the position before losses become too large
Be aware that losses can be unlimited if the stock price rises