Chart, page-11939

I don't get it. If you borrow shares to sell short, as soon as you hit the sell button, it is out on the market for whomever to buy. The shares that have been loaned out still appear as owned by the account where the broker take them from. Only when the owner wants those shares (sell or transfer), then the broker has to do something such as borrowing from another account or force a cover on the open market. As the settlement always happens later after the actual trades, the broker has time to find the shares. However, I know that brokers make sure there are enough shares to allow borrowing. If they see the risk of not being able to settle trades, they stop the lending.