[BarkingMad]

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But how does this actaully apply to stocks?

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From a practical standpoint, shorting is as easy as clicking your mouse (once you have a brokerage account).

Understanding what goes on behind the scenes after you place your order to sell short is important, but most explanations I've read invariably make it seem complicated when it's not.

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Does your broker credit your account based on the current stock value, allowing you to profit from the difference when you buy the stock at a lower price

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No. Money will not be credited to your account when you sell short.

You click your mouse on the "sell short" button at your brokers website, and the process of borrowing and then selling shares happens almost instantly.

BradleyT gave an 'OK' shorting explanation, but he left the door open for confusion when he said "I'm borrowing and selling 1000 shares of Yahoo at $30, so I'm getting $30,000"

To clarify, there will not be $30,000 hitting your account while you are "short". Your account is adjusted
for trade profit/loss after you exit the trade.

When you want to exit your position, you click the "buy to cover button", and you buy shares back on the exchange and return them to your broker (who you borrowed from). This also happens almost instantly.

Lance