When you sell short a stock, do you pay interest on the borrowed stock until you buy to cover?

[her209]

Is it treated as borrowing on margin?

 

[her209]

bump!

 

[Jadow]

I've never shorted a stock, but yes I do believe it is on margin.

 

[gotsmack]

only if you use margin to short the stock

most places require that you have a margin acount in order to short.

 

[ponyo]

You can only short on your margin account. At least it's that way with my broker.

You don't pay interest on the shorted stock as long as you have sufficient funds in your account to cover the short sale. You do have to pay any dividend if the shorted stock pays dividend. Another negative is that you don't get paid interest on the money from the short sale unless a you're bigtime investor.