No problem. I guess I should have utilized an example. What makes the explanation more complicated is recognizing that the margin requirements depend on the share price of the stock you are shorting. Let me use Scottrade as an example. Their margin (maintenance) requirements are as follows:
Share Price and Minimum Maintenance
$12.50 and up...40%
$5.00 - $12.49...$5 per share
$.01 - $4.99...$2.50 per share
Let's say I short 1000 shares of AGNC at 30.00. I receive 30,000 dollars minus the 7 dollar transaction commission. From the requirements above I need to separately hold 40% in cash (12,000 dollars) to avoid borrowing against that short. If the share price rises above 30 to say 31 and I have no more than the 12,000 allocated to maintenance, THEN it enters a borrowing. As such:
40% of 31,000 is 12,400 dollars. Now I would be borrowing the 400 dollars and paying interest on it. I said to look at shorting costing half as much as buying the shares. That would translate to retaining a 50% maintenance amount or 15,000 dollars in relation to the example. This offers me a hedge if the share price rises after I execute the short and keeps me out of a borrowing situation.
I HATE paying interest and in all the years I've had credit cards I have never paid one cent in interest on them either! :o)
Fidelity........ sorry, but they suck IMHO. I don't like them because they are a market maker. Enter an order and you have a better chance of seeing your order filled, BUT they will also piggyback your order and use it to benefit themselves. You can't profit until they get theirs first, a transaction fee is not good enough for them.... I learned this from being a long time past client of theirs.