''XYZ is currently at $100 a share. If you have a $100000 account and you sell short 100 shares of XYZ, your account of $100000 is credited with $10000 worth of XYZ. If the short transaction occurs on March 1, 2008 and you get out a month later at $110, then interest charged by the brokerage will be .......... ?????" Using the above example to determine interest fees accrued by the brokerage, I've been told by brokers and have read different explanations concerning interest charged when shorting a stock. Maybe each one of these brokerages is right based on how they run their 'own' business. However, I thought short interest rules would be pretty much universal among brokerages. They all told me that I'm responsible for dividends, but all you have to do is get out a day or two before dividend day comes up. I'd also like to know if there is a brokerage best suited for shorting stocks based on their available shares to borrow from, or if any ole brokerage will do, (which I doubt) along with number of stocks that are allowed to be shorted. First explanation 1. The above scenario incurs no additional fees (interest) other than roundtrip costs, due to the fact that no margin has even been used. The amount you sold short would have to reach over $100000 before any margin was even being tapped into. Had you sold short $150000 worth of XYZ, then interest would begin to accrue daily on the extra $50000 you borrowed on op of the $100000 you already had. (You would be responsible for dividends, however. 2. The above scenario requires you to pay interest on the $10000 since this is what you borrowed. As the stock price goes up and down everyday, so does your amount to be charged interest on goes up and down. 3. If you have a $100000 margin account at a 3 to 1 ratio, you could hypothetically short $250000 worth of XYZ and not pay any interests assuming price doesn't get above $300000 Are any of these correct?