Thanks for the reply, but I'm still not sure what's going on here. I guess they want it that way. You say 102% on a short. I don't quite get it. Lets say you have an account with 50,000 cash. You short 50,000 worth of stock, so theres no margin being used. How does this 102% get calculated in that case. Is there some reason this is not explained transparently somewhere?
When you short a stock money flows into your account from the proceeds. 100% of this PLUS another 2% is pledged as collateral for the borrowed stock. In addition you then have a margin requirement at your brokerage. In your example having 50K in an account is not the issue. In the hard to borrow (or specials) names you will pay the brokerage an additional fee...negative rebate...beyond getting no return on the invested credit amount from the short sale. Best