I'm still trying to work out who actually pays the "winnings" on these bets (or call/put/short options as they call them)?

I understand that if you buy a share and its' price goes up you make a profit, it goes down you make a loss. In both cases, only when you sell them on.

However, if you "bet", as this bloke appears to have done that the market (Dow Jones maybe?) will drop, you haven't bought anything as far as I know. How does this work?