Short Sales Allow investors to profit from declining security prices. The investor borrows stock from their broker and then sells it. The goal is to buy it back cover the position) in the near future at a lower price. The short seller must pay any dividends that are due the original owner of the stock. Example of a Short Sale: Suppose that you expect the price of GM to fall soon, so you short 100 shares when its price is $100/share. You expect to buy it back in one month when the price is $80/share. During this period the stock pays a $2/share dividend. What is your $ profit from this transaction