Short-selling a security means borrowing it and then immediately selling it with the intention to repurchase it later at a lower time-discounted price right before you return the principal (in the form a a security instead of cash) to your creditor. In this case, you borrow exactly enough of the underlying security such that you will acquire ke−rT in cash by immediately selling it.
Short-selling a security means borrowing it and then immediately selling it with the intention to repurchase it later at a lower time-discounted price right before you return the principal (in the form a a security instead of cash) to your creditor. In this case, you borrow exactly enough of the underlying security such that you will acquire ke−rT in cash by immediately selling it.