Friday, May 23, 2014 1:44:10 PM
sons4, I never shorted anything either, so I'm not sure, but I don't think they have to pay any interest, unless they don't have enough money in the account and have to use margin.
For example, let's say that margin requirement to short 1 SPIHF share is $4.00. If someone shorts 1000 shares, they need to have $4,000.00 cash in the account. After they cover, they only pay transaction fees (with my brokerage, it would be 8.95 x 2 = $17.00).
The $4.00 per share is not a fee, but sort of a collateral for shorting, the brokerage holds it until the shares are covered. However, if the price goes up, the brokerage can force their clients to cover at any time.
This is just my understanding of how it works, please let me know if I'm wrong.
SPIHF ANY OVRL
For example, let's say that margin requirement to short 1 SPIHF share is $4.00. If someone shorts 1000 shares, they need to have $4,000.00 cash in the account. After they cover, they only pay transaction fees (with my brokerage, it would be 8.95 x 2 = $17.00).
The $4.00 per share is not a fee, but sort of a collateral for shorting, the brokerage holds it until the shares are covered. However, if the price goes up, the brokerage can force their clients to cover at any time.
This is just my understanding of how it works, please let me know if I'm wrong.
SPIHF ANY OVRL
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