Your first description is a “naked short”. A “covered short” or “hedged short” includes step 1.5 - buy a call option or otherwise arrange a way to get the share back, even if open-market shares are more expensive than you can afford. note that WRITING a call option has much the same impact as selling a share short—you run the risk of the option being excercised (buyer chooses when!) and not easily delivering the share. And often are hedged the same way—write calls, and buy different calls (with different expiry or strike price, so they’re cheaper than the ones you write).
Your second description is a pure futures contract, which AFAIK happens for commodities, and not for stocks. This kind of trading drove the price of crude oil negative last year (also with big headlines that the financial system was exploding) when futures buyers realized they couldn’t actually take delivery of the oil.
Your first description is a “naked short”. A “covered short” or “hedged short” includes step 1.5 - buy a call option or otherwise arrange a way to get the share back, even if open-market shares are more expensive than you can afford. note that WRITING a call option has much the same impact as selling a share short—you run the risk of the option being excercised (buyer chooses when!) and not easily delivering the share. And often are hedged the same way—write calls, and buy different calls (with different expiry or strike price, so they’re cheaper than the ones you write).
Your second description is a pure futures contract, which AFAIK happens for commodities, and not for stocks. This kind of trading drove the price of crude oil negative last year (also with big headlines that the financial system was exploding) when futures buyers realized they couldn’t actually take delivery of the oil.