Potomac, if he is working with a market maker, it is the market maker that actually shorts the stock, and it costs them nothing. It is all legal, and is called "making a market." I have always found it comical that message board people think individual investors are doing the shorting. If one has a lot of money (penny stock investors typically do not), then stocks can be shorted on overseas markets that funnel orders into ours, but as far as I know, only company owners do that type of thing.