That is one of 3 trades i quoted. Keep up the good work giving out bad advise. Option traders are more than glade to take your money. Thanks you for being on the other side!
you offer excuses. I said which technique (OTM call option credit spread) was not a good duplicate of an outright short sale. my advice to avoid that technique is correct. all your hemming and hawing and snarks doesn't change the reality. the fact that you cannot address the issue directly speaks to your character. markets don't react kindly to participants like yourself. lots of luck.
Lets say you have 30,000 in your account and you short 1000 shares of a stock which is $5 per share and it does not pay any dividend. You will not be paying any margin interest but if you keep this position for an unlimited period of time (I mean decades) even if the stock stays exactly at $5, your account will go to zero because of borrowing cost. Borrowing cost also depends on the stock. hard to borrow stocks have higher cost.
Please check out the borrowing cost of stocks in IB. https://www.interactivebrokers.com/...pecializedorderentry/compare_borrow_rates.htm
let me clarify. my comment applied to most retail firms other than IB. it is one of the few times that there is an additional cost at IB. of course your example is an extreme example. it is quite similar to saying that losses in short can be almost unlimited. furthermore firms other than IB make up for it in many ways. e.g payment for order flow resulting in worse executions, worse price improvement, margin rates 3X etc.