What is generally the expected outcome of short selling a stock?

The expected outcome of short selling a stock is to profit from a decrease in the stock price. When an investor engages in short selling, they borrow shares of a stock and sell them at the current market price, anticipating that the price will fall. If the stock price indeed declines, the investor can buy back the shares at this lower price, return them to the lender, and pocket the difference as profit. The goal is to capitalize on market movements by betting against the stock, making this strategy fundamentally different from traditional investing, where one typically profits from price increases.

In contrast, holding shares indefinitely does not apply to short selling, as this strategy involves selling borrowed shares with the intention of buying them back later. Transferring stocks between investors is a normal part of the market but does not reflect the specific purpose or outcome of short selling. Similarly, short selling does not increase the stock price; in fact, it can contribute to downward pressure on the price if significant short selling occurs, as it indicates a lack of confidence in the stock's future performance.