You will be charged a stock borrow fee, which is inversely related to the relative supply of the stock you are shorting.
IB claims to pay a rebate on the short proceeds, which would offset part or all of that fee, but it doesn't appear relevant in your case because:
- Your short proceeds are less than $100k
- You spent the short proceeds already
It is a bit strange to me that IB would not require you to keep the cash in your account, as they need the cash to collateralize the stock borrow with the lending institution.
In fact, per Regulation T, the short position requires an initial margin of 150%, which includes the short proceeds. As described by Investopedia:
In the first table of Figure 1, a short sale is initiated for 1,000
shares at a price of $50. The proceeds of the short sale are $50,000,
and this amount is deposited into the short sale margin account. Along
with the proceeds of the sale, an additional 50% margin amount of
$25,000 must be deposited in the account, bringing the total margin
requirement to $75,000. At this time, the proceeds of the short sale
must remain in the account; they cannot be removed or used to purchase
Here is a good answer to your question from The Street:
Even though you might see a balance in your brokerage account after
shorting a stock, you're actually looking at a false credit, according
to one big brokerage firm. That money is acting as collateral for the
short position. So, you won't have use of these funds for investment
purposes and won't earn interest on it.
And there are indeed costs associated with shorting a stock. The
broker has to find stock to loan to you. That might come out of a
broker's own inventory or might be borrowed from another stock lender.