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Is there any difference when shorting stock under the following 2 brokerage accounts?

  1. $0 cash $50k in stocks
  2. $50k cash $0 in stocks

Would you have to pay margin like longing a stock in scenario 1 since you have no money left?

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If the $50k worth of stocks are marginable securities then there is no difference between either scenario. They are equal collateral.

When you short stock, you receive a credit in your account from the sale of the security. You are not borrowing money from your broker so there is no margin interest. However, there is a borrow fee which is paid to the lending broker, some of which may be shared with your broker and some brokers share a portion of the borrow fee with the owner of the loaned security.

Margin interest is constant. Borrow fees can vary day to day, sometimes dramatically.

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  • Interestingly, I haver never been charged anything for short selling shares (and buying them back after some days). Maybe the amount is too small and rounded to zero…
    – Aganju
    Commented Mar 12, 2022 at 20:20
  • If the dollar value of the transaction was low and the borrow rate was minimal (the lowest I have seen is 25 BP) then it's possible that the total borrow cost was less than a penny a day. But for a legit stock, say AAPL, GOOG, et al, it would be more significant. Maybe it's possible that the broker eats a fee of a few pennies.
    – Bob Baerker
    Commented Mar 13, 2022 at 7:11
  • It was like several times a 100 AMZN and maybe 300 TSLA, for two to four days most times. So yes, significant volumes / values; but all as liquid and 'borrowable' as they come. Well, I'm thankful they were free. ;-)
    – Aganju
    Commented Mar 13, 2022 at 7:37

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