> The 'A shorts to B who shorts to C' type arrangement is unlikely in the extreme. Would B keep paying A for the borrow (and have the collateral tied up) if the

> The 'A shorts to B who shorts to C' type arrangement is unlikely in the extreme. Would B keep paying A for the borrow (and have the collateral tied up) if they have passed the stock to C? Nope, they'd return it... I think you might've misunderstood the explanation. In Matt Levine's example, A lends to C, who sells to D, who lends to E, who sells to F. B can't just return the shares to A because they've sold them, and they aren't just going buy them back because the whole point is that they want to be short.