[TrainedMonkey]

It is not possible to short anything directly. Only direct actions are to buy and sell.

Options are derivative products that other people offer. They looks at statistical volatility and price their options, such that they make some $ on average. This means you can short bitcoin, just like anything else - you need to find someone offering the service.

[baddox]

When you think about it, even "buying and selling" don't exist as far as the Bitcoin protocol is concerned. There is only creation of new Bitcoin (via mining) and transferring them around. Granted, there is a lot of potential complex functionality based on Script, but as far as I know not much is supported by widely-used Bitcoin clients.