Stock Market Question.?

It comes from a loss of wealth shared by the buyer who bought your borrowed stock way high

And the seller who you bought back from who sold way low

Well, if you have that inside information, the SEC will be visiting you soon.

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Comes from the brokerage. Shorting stock is basically like making a bet with your brokerage. If you win, they pay. If you lose, you pay.

From the proceeds of previously selling the stock that you borrowed from your broker.

the company

This is a short sale. In a short sale, you actually are selling a stock that you don't really have. When you close out the short sale, you MUST buy the stock. The money comes from somebody (like a broker) who is buying the underlying stock when you "short" it.

loan from the broker

You sold for $10,000, so you have a credit in your account, later you buy the stock to cover the sale, so your account receives a debit of $7,000 (the cost of the purchase) thus you have no more position and your account has a credit remaining of $3,000

"lee26loo" is totally off the wall - a short seller DOES NOT borrow stock, stock is borrowed for the benefit of the seller's brokerage firm, there the firm borrow the stock.

"Zman" - the buyers of the shorted stock may not have loss any money and their purchase is totally unrelated to the activity of the short seller - they may have bought their stock at a much lower price than your short sale.

Your profit comes from the fact that other people were willing to buy shares for $50 that you only paid $35 for.

Just like if you had bought the shares first and then sold them when the price went up.

The people who lost money are the ones who paid $50 for shares that are now only worth $35.

What you did, in extremely simplified terms, is you sold a promise to provide shares of stock.

You collected $10,000 by selling a promise that you would provide 200 shares of stock.

You then fulfilled that promise by purchasing the stock for $7000 (at the reduced price), and handing the stock to the people who had purchased your promise. That left you with a net profit of $3000.

The people who bought the stock at $50/ share lost $3000 because they owned the stock while it went down, so they paid $10k for something they could have purchased later for $7k.