what is shorting a stock, page-5

Hi

I think this is the way it works correct me if i am wrong.

Stock XYZ is at $3.00sp

You believe that the stock will go down within the month an announcement is pending and you think it is going to be negative.

You then borrow the stock from your broker say 10,000 shares. You sell these to the market at $3.00. = $30,000

You still owe the shares to the broker as he lent you the shares.

You are correct and the price drops to $2.20 You now buy the shares back 10,000 at $2.20= $22,000

You return these to the broker

$30,0000-$22,000......so You have made $8000 profit less brokerage.

Happy to be corrected if i am wrong.

Cheers
U