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Message:: [QUOTE="NorthKorea, post: 1295362, member: 29643"]When anything is shorted, it has to be borrowed from someone else. So, in the case of SLV, this would be the result: Person A owns 100 shares of SLV. (100 ounces of silver held in trust.) Person B shorts 100 shares of SLV. Person B's broker must borrow 100 shares from their holding or from a third party. We'll assume it's from a third party. Person C is long 100 shares of SLV, but allows person B to borrow their shares. There are 200 shares of SLV accounted for above. It just so happens that 100 of those shares are "spoken for" in the short transaction. This is why shorts must be placed on margin. You are paying the owner of the shares a form of interest for agreeing to no liquidate their position until you close your short. The 200 shares still represent 200 ounces of silver in SLV. The perception in the public could be that two (or more) individuals lay claim to the same ounce of silver, but that simply isn't the case.[/QUOTE]