Selling short is basically gambling that stocks will fall in price.

The problem with it is that a big price rise could leave you well out of pocket - even owing money.

For that reason, many brokers are unwilling to let investors go short unless they are certain the client will be able to cover any losses.

Concerns

Shorting, as it's sometimes known, is restricted in many Asian countries because of concerns that it damages the markets.

So how does it work?

Suppose you were buying a bar of chocolate. You'd hand over the money, get your chocolate and that's the deal done.

But when you buy and sell shares, there's a period between striking the deal and actually handing over the certificate.

This is usually three days, known as T3.

Lower price

So let's suppose you thought that Working Lunch shares were going to fall in price.

You'd agree to sell some - say, 100 at �1 each. If in the next three days, they did fall - let's say to 75p - you'd hunt around for some shares at the lower price.

You'd then get those shares to your buyer, who would be obliged to pay you �1 each for them. The result is a profit for you of �25.

But to make things less of a rush, sometimes it's possible to extend the period between sale and completion to 20 days - or T20.

That's basically how to sell short - and the riskiness of the scheme is obvious.

Money lodged

If Working Lunch shares went up 25p instead of falling, you'd be facing a loss.

And if we were talking about thousands of pounds, it's easy to see why many stockbrokers are fussy about who they do short business with.

Some will allow selling short, but if the share price starts to rise, they might come back to their client asking for some money to be lodged as a sign that they can cover any losses.

"What we want to see is that anybody who is going to offer short selling does so on a responsible basis," says Diane Hay of ProShare, "so that people who go into it know exactly what they are doing and appreciate the risks they are taking."

If it all sounds a bit too complicated, the same result can be achieved through a put option.

Spread betting

This gives you the right to sell stock at an agreed price at some point in the future. Its value rises as the share price falls.

There is also spread betting, where a bookmaker might offer you a spread on a particular share rising or falling.

Again, just as profits can be big, losses can be unlimited in the event of a spectacular increase.

This is without doubt a sophisticated way of playing the market, and one normally used only by institutional investors.