What is the meaning of the term selling short?

An investor sells short when he anticipates that the price of the shorted stock will fall from the existing price. He borrows a share and sells it. As the share price dips, he buys the same share at a lower price and returns it back, while pocketing a profit in the bargain. An adage that describes short selling is ("selling high and buying low'.) Selling Short (Shorting) is an effective tool for traders as it allows us to profit from declining stock and index prices.

A definition of "Selling Short"

Selling short implies establishing a market position by selling a security one does not own, in anticipation that the price of the security will fall.

For e.g. Trader anticipates stock ABC will decline
Trader enters order to SELL 2000 shares of ABC at market price and later buys the 2000 shares of ABC at a much-reduced price. The difference in the prices of the selling and buying is his profit. However if the share prices increase after he has sold at a reduced price earlier, then he ends up with a loss. Hence Short selling is something that is speculatory to a certain extent and is done in anticipation of quick profits.