It’s not that different from borrowing money to buy a house or car…. Banks/brokerage lend out other customers’ money/shares. You repay the loan or cover the short and the money or shares are returned to customers. It’s done on an abstract basis, ie. if you own shares or have money in a bank, they’re not going to tell you that you can’t sell your shares or pull out money because it’s being lent to another customer.
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