ERHC Energy Inc (ERHE)

[bblack]

frankly I'm not even sure where to begin.

when you short, you're obviously borrowing shares from someone who is long. These days you need a "locate" from the stock loan dept in order to substantiate that it's not a naked short. (btw you can't borrow your own shares)

Sometimes there is charge to borrow, often there's not. I've seen charges as high as 70% ...not a typo.

The collateral for the short can be any long marginable security in your account, including treasuries, munis, stocks, etc. Treasuries have the highest margin release.

The short sale is an open market transaction so of course there is a buyer for your sale, just as there is a buyer for every sale
whether it's a sale of a long position or a short sale.

Buy-ins occur (sometimes) when the lender of the stock sells his position and the firm can no longer find shares to borrow in order to settle the trade so they buy-in the shares that were previously loaned.

once a week, the short position is marked to the market and the short credit is adjusted higher or lower depending upon the change in price of the security. If the short goes against you (price appreciates), the firm increases the short credit and debits your margin or cash account. This continues weekly until the short is closed out.