Hi guys. Me again (sorry) - I've got a question regarding the practicalities of shorting a stock. I know how it works in theory - basically you borrow a stock, then sell it, hoping it will decrease in value, and you can then buy it back cheaper and return to the lender, keeping the difference.
But I don't entirely understand how it works in the real world. From the wikipedia article, I understand that generally the lender is paid a fee to allow stock he owns to be borrowed, but it doesn't say anything about exactly how much the fee is, how it is calculated, how it is paid, when it is paid, etc.
I suppose for the purpose of the question, lets say that I was shorting with IB, as I'm considering opening an account with them. (Does IB allow shorting on the ASX by the way? I've read some old threads about IB suggesting they intended to allow it, but I can't find anything on the IB website about it) What would I need to do to short a stock?
I've seen a couple of live trading videos on youtube in which a trader shorts stock and it seems just as streamlined as going long (ie click a button and voila, you've shorted it), but given that it is quite a bit more complicated behind the scenes, is it really that simple from the end user (trader)'s point of view?
Also, according to the Wikipedia article, the lender of stock retains the right to sell it (which is fair enough. If I owned stock that was diving, I'd want to be able to sell it too!), but how does that affect an open short trade using the borrowed stock??
As I said, it all makes sense in theory but in practise I can see a lot of potential issues.