Cryptocurrency Q&A
How much does it cost to hold a short position?
How much does it cost to hold a short position?
Sara
Wed Nov 13 2024
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7 answers
1113
I'm wondering about the financial aspect of maintaining a short position. Specifically, I want to know how much it would cost me to keep such a position open.
7 answers
CryptoQueenGuard
Fri Nov 15 2024
To secure this transaction, you'll need to rack up a margin loan for the value of the borrowed stock.
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Stefano
Fri Nov 15 2024
This margin loan is essentially a collateralized debt that you'll repay when you eventually buy back the shares.
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MysticGalaxy
Fri Nov 15 2024
The broker will charge interest on this margin loan, which can be higher than the standard annual interest rates.
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CloudlitWonder
Fri Nov 15 2024
In addition to the interest on the margin loan, short sellers are also charged a fee known as the "cost of borrow."
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Silvia
Fri Nov 15 2024
Shorting a stock involves borrowing shares from a broker and then selling them immediately in the market.
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