Short selling means that you borrow shares of stock to sell to someone else. You probably can’t do this in a basic account or a retirement account (with some minor exceptions). Your broker will find someone on your behalf. Some stocks are hard to borrow. Your broker might not be able to find enough of them.
You’re still on the hook for any dividends and have to compensate the original owner for any dividends they miss. Again, the broker should handle this automatically. If the market price falls, you can then cover your short position for less than you sold it for, which is a profit. The opposite case would be a loss. If you do have a margin account, your broker may also loan your shares to someone else to sell. Some brokers compensate you for this. If your shares are loaned out you still get the dividends, but they don’t count as dividends for tax purposes.
Short selling means that you borrow shares of stock to sell to someone else. You probably can’t do this in a basic account or a retirement account (with some minor exceptions). Your broker will find someone on your behalf. Some stocks are hard to borrow. Your broker might not be able to find enough of them.
You’re still on the hook for any dividends and have to compensate the original owner for any dividends they miss. Again, the broker should handle this automatically. If the market price falls, you can then cover your short position for less than you sold it for, which is a profit. The opposite case would be a loss. If you do have a margin account, your broker may also loan your shares to someone else to sell. Some brokers compensate you for this. If your shares are loaned out you still get the dividends, but they don’t count as dividends for tax purposes.