Lots of people are in stock market today and still they don't know all posibilities on the market. I'm dealing with stock market for 2 years and I have watched all Tim Sykes videos and did how I say : "Theory part". It is now to just practice. The most trouble I had with understanding some of the terms and the hardest one was short selling. I just couldn't get it how it works and after a year I managed to understand what is it.
To begin, if you want to get your place on stock market you need to get yourself a broker who has licence and he is your connection with stock market. I'm using Interactive brokers because they have the best software but it is from person to person.
So you want to short sell some stock lets call it XYZW.
So you go to your broker and tell him :Hey I would like to short sell 100 stocks of XYZW. He says ok and after he sells them he give you the money from selling them at the current price and for return he asks you to return him 100 stocks. Yap, that is it. Broker sells stock on the price you ask and gives you the $ from selling and for return you need to give him amount of stocks you asked him to sell.
Is this legal?
Apsoluteley it is. It sounds a little bit wierd but this is how it works. Many people before were accusing people it is ilegal to short sell stocks but it is not. It is same principle for normal buying of stocks instead you go in oposite direction