I'll admit it, I don't understand why you have to pay the dividend if you're short.

This has never made sense to me. If you're short a stock, you have to pay your brokerage the dividend.

Okay, so you're paying the dividend to your brokerage if you're short, but the corporation is also paying the dividend to the owner of record.

I can understand the owner of record should be made whole and collect the dividend they would have otherwise been entitled to, but if you have "borrowed" the stock to short it, I don't see why you don't collect then dividend, then remit it to the lender of the shares, (making the dividend issue a wash for a short seller)

Anyway, I've always known you have to pay the dividend if you're short, but it never made any sense to me. It seems like your brokerage is getting paid from you AND the corporation.

What am I missing here in my logic?