shorting overnight- margin interests charged ?

Discussion in 'Trading' started by luisHK, Jan 29, 2011.

  1. luisHK

    luisHK

    Hi

    I understand that when one short, they use margin, no matter how much cash is available in their account.

    Does that mean that when holding a short overnight position they are charged interest from their broker on the (inverse )value of the short position ? I didn't think of that before but just read an article hinting to it, and there must be a reason why some investors/traders prefer to use inverse ETFs rather than shorting the ETFs, despite the higher expense ratio for the inverse ETFs ?