Let`s say you borrow 100 shares and sell them immediately @ $10 each = $1000
The stock drops to $5/share so you buy back the same 100 shares for $500, return the shares, and keep $500 as your profit. That`s how you profit when you `short` a stock.
And Remember, if the stock goes UP, say to $15/share, you have to buy it back for $1500 and return the shares, so you LOSE $500! That`s the downside . . .
