So, if I want to short 1,000,000 shares of a .01 stock - I have to tie up $2.5M of equity to do so, even though the actual equity position is only $10k.
Now were getting somewhere. So apparently one doesn't have to have millions in existing cash on hand to trade certain short positions and one uses leverage in shorting as well, much like futures? Now we're talking non cash backed instruments of the broker 'credit' to allow short positions? So what some of the comments are about is the RISK of losing millions after the fact, not at the time of the positions? Perhaps like visa extends credit to a consumer who spends 10 thousand on a car.. the consumer isn't spending any of his money to buy the car, he will pay back the bank later at criminal interest (that's another story) thus the consumer risks that car.
