You'd probably have to keep adding money to your account to meet margin requirements. In my example I tried to stay within margin requirements and use the profits to purchase more shares. Basically, I could start with 5k and not need to add any money.
Do the math. 100 shares of ABC at 100, which is 10k? right? I have 10k coming in for selling it. Now I cover at a dollar. I have 100 going out, so profit is 9900. Even if I give you the benefit of the doubt with 4 to 1 leverage, you still wouldn't get 1000% return. Edit: This is for carrying the actual stock, someone playing options can sure make more than 1000% on the short side.
The point of the thread is people think like you did. Others think better. Few think even better, and the tiny minority .... You can make at least $490K profit on your stock example. You can make even more. Did you read what was posted earlier in this thread or you did not understand what was written?
You profit is 9K, but I wrote you can make at least 495K. Reg. T is enough. Re-read the posts. None so far showed exatly how to make 495K on your example. Also you can make more than 9900% percent return. The case is to educate first. View it as theoretical case.
lets get the variables down? are we talking 10k to start and shorting 100 shares? I am trying to think of the formula used for the outcome you are speaking of. It is right there, lol.
ABC goes from 100 to 1. What is the maximum you can make in % terms? What you start with is not important. What is important is the %.