Short Selling
The most common reason to borrow securities is to cover a short position - using the borrowed securities to settle an outright sale. As such the repo market has enabled trading from the short side. This is rarely a simple speculative bet that the value of a security will fall so that the borrower can buy it more cheaply at the maturity of the loan. More commonly, the short position is part of a larger trading strategy, typically designed to profit from perceived pricing discrepancies between related securities. See Securities Lenders for more on this.
