Who Benefits From Loaning Shares at a Quick Sale?

To answer this Question, we first need to clarify who's doing the lending in a Short Sale trade. Many individual investors think that because their shares are the people getting lent to the debtor, they are going to get some benefit, but this isn't the case.
When a trader wants to take a short position, she or he borrows the shares from the broker without knowing where the shares come from or to whom they belong. The borrowed shares may be arriving out of yet another trader's margin accounts, out from the stocks being held in the agent inventory, or maybe from another brokerage business. It's very important to be aware that, once the trade was placed, the broker is the party doing the lending company and not the investor. So, any benefit received (alongside any risk) belongs to the broker.

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