Schwab wants to charge me interest on the money I received for selling TSLA short
Brokers have the right to charge interest on any stock that they lend you. Since you borrowed the TSLA to short it, the owner of those shares can charge you interest until you return them. If you are not getting charged interest on some shares that you have borrowed to short, consider it generosity on the part of the lender. I agree with Mark.  I was quite confuse about the short position at first but then I did a lot of learning and found out that as long as you have enough cash to cover your margin requirement you do not pay any interest since you do not have a debit on your margin balance.  This is not true for a long position though, supposed you have 5k cash and 5k margin balance, if you buy 10K worth of stocks then you will need to pay interest on the 5k of the margin balance since it is a debit.  Since shorting is done at a credit basis, you actually get interest from the transaction but you still may need to pay the borrowing fees for the stocks so they could simply balance each other out.  I have shorted stocks twice through two different companies and neither time I noticed any interest charges.  But make sure you have enough cash to cover your margin requirement, because once your margin balance is used to covered your position then interest would accrual. Learn.
"Usually not the total interest, but all interest accrued and unpaid to date. This is called the ""Loan Payoff Amount"", and repays the bank their principal plus the ""true"" cost of capital on that principal since your last amortized payment (which is probably never, since you just signed the loan papers). There may also be a ""prepayment penalty"". This is something that should have been disclosed to you if it exists, but it's fairly rare in U.S. mortgages anymore.  The theory is, the bank got the money they paid you at the start of the loan by selling a bond package backed by your mortgage and others of similar credit history and/or about the same time (a ""mortgage-backed security""). By turning around and paying early, you meet your obligation, but the bank is now stuck with at least 10 years of quarterly coupon payments on that bond, which they were expecting to pay using your mortgage interest. For their trouble, you would pay an additional amount that either covers their ""call price"" on the portion of the bonds used for your principal, or simply buys them the time to re-issue a new mortgage using your repaid principal to back the bond again. In the modern housing market, such a prepayment penalty is very rare, because so many lenders are willing to give you a mortgage without one, and so many buyers balk at the thought of having to pay more if they pay early; the whole point is to pay less by paying early. Just something to look up in your mortgage documentation." You could think of points 1 and 3 combined to be similar to buying shares and selling calls on a part of those shares. $50k is the net of the shares and calls sale (ie without point 3, the investor would pay more for the same stake). Look up convertible debt, and why it's used. It's basically used so that both parties get 'the best of both world's' from equity and debt financing.   Who is he selling his share to in point 2 back to the business or to outside investors? You would have paid $880.00 plus commission in this case, and made $85 before commissions. How much you would have made on expiration depends on the price that TSLA has on April 1, which hasn't come yet.  If it expires worthless, you typically don't pay a commission but you will have lost the full $880.  If it expires in the money and you want to exercise it, then you would pay a commission (often different than the commission to buy/sell the option itself) and you would have 100 shares of TSLA.  You won't know how much you make or lose in this case until you ultimately sell the shares of TSLA. No, the expense ratio would be something you wouldn't be charged. If you bought shares of the ETF long, then the dividends are usually reduced by the expense ratio if you wanted to know where to find that charge in general. You would have to make up for any dividends the underlying stocks as part of general shorting since the idea is that once you buy to put back the shares, it has to appear as if they weren't missing in the first place. No, the authorized participant would handle changes to the underlying structure if needed. When I log in to Schwab to look at these options it tells me there's only Adjusted Options available on these terms: Adjusted Options:   Multiplier: 100; Deliverable: 15 PTIE; Cash: ---- It does confirm your July Call quote price of $0.05 because the contract, though priced for 100 shares, will only deliver 15 shares.  Separately, looking at the company website for news there was a 7 for 1 Reverse Split announced on May 8, which is the culprit for this option adjustment and the seemingly nonsensical call price. Shorts need a buyer on the other end somewhere, if there is no one interested in taking the other side of it, you probably won't find anywhere you will be able to execute that trade. Take a look on your broker's site, see if it's an option they will even give you. * Absolutely agree with /u/IsAnAlpaca  * You /must/ not agree to this without seeing his balance sheet. * That means assets and liabilities, but also ask for the last 12 months' cash flow * Inability or unwillingness to provide any of those things is a HUGE no-go red flag. "Say we are in 'normal times.' Passbook rates are 5% or so. Longer rates, 6-7%. I offer you a product with these terms, for $10,000 I will return a ""Guaranteed"" $10,000 in 6 years and based on the stock market, 1% for every 2% the S&P is up beyond 10% at maturity. As the seller of this product, I take $6666, and buy a fixed investment, 6 years at 7% in treasuries will return the $10000. Really. I then take the $3334 and buy out of the money calls on the S&P each year to capture the gains, if any, and to deliver on my promise.  This is one example of a structured deposit offering. They can have nearly any terms one can imagine. Tied to any product. S&P, Crude Oil, Gold. Whatever." It's true that most states have limits on what finders can charge if the listing is in state possession. If it is in the pre-escheat phase (that period of time before it goes to the state) then even if the money will eventually go to the state, the limits don't apply. Keane does a lot of work with transfer agents that handle the administrative work of stocks.  Other options that have a time limit include  I have a friend that was contacted by Keane. It turned out to be stock that her mother had when she worked for AMEX. She got busy with other things and got another letter from Keane. The stock increased in value and they wanted more money to help her even though they had already done the work of finding her. The money eventually went to the state and she was able to claim the full amount for FREE. If the suggestions I gave you don't get results, contact me through my web site and I'll try to help. Good luck! "Here's an example that I'm trying to figure out.  ETF firm has an agreement with GS for blocks of IBM. They have agreed on daily VWAP + 1% for execution price.  Further, there is a commission schedule for 5 mils with GS.  Come month end, ETF firm has to do a monthly rebalance. As such must buy 100,000 shares at IBM which goes for about $100  The commission for the trade is 100,000 * 5 mils = $500 in commission for that trade. I assume all of this is covered in the expense ratio. Such that if VWAP for the day was 100, then each share got executed to the ETF at 101 (VWAP+ %1) + .0005 (5 mils per share) = for a resultant 101.0005 cost basis  The ETF then turns around and takes out (let's say) 1% as the expense ratio ($1.01005 per share)  I think everything so far is pretty straight forward. Let me know if I missed something to this point.  Now, this is what I'm trying to get my head around. ETF firm has a revenue sharing agreement as well as other ""relations"" with GS. One of which is 50% back on commissions as soft dollars. On top of that GS has a program where if you do a set amount of ""VWAP +"" trades you are eligible for their corporate well-being programs and other ""sponsorship"" of ETF's interests including helping to pay for marketing, rent, computers, etc.   Does that happen? Do these disclosures exist somewhere?" Do you have signature authority or interest in the account? Then yes. Interest in the account means that you wire $25K to your dad, but the money still belongs to you (I.e.: if you ask for it your dad will give it back to you). They will make money from brokerage as usual and also from the interest they charge you for lending you the money for you to buy your shares on margin. In other words you will be paying interest on the $30,000 you borrowed from your broker. Also, as per Chris's comment, if you are shorting securities through your margin account, your broker would charge you a fee for lending you the securities to short. "With (1), it's rather confusing as to where ""interest"" refers to what you're paying and where it refers to what you're being paid, and it's confusing what you expect the numbers to work out to be. If you have to pay normal interest on top of sharing the interest you receive, then you're losing money. If the lending bank is receiving less interest than the going market rate, then they're losing money. If the bank you've deposited the money with is paying more than the going market rate, they're losing money. I don't see how you imagine a scenario where someone isn't losing money. For (2) and (3), you're buying stocks on margin, which certainly is something that happens, but you'll have to get an account that is specifically for margin trading. It's a specific type of credit with specific rules, and you if you want to engage in this sort of trading, you should go through established channels rather than trying to convert a regular loan into margin trading. If you get a personal loan that isn't specifically for margin trading, and buy stocks with the money, and the stocks tank, you can be in serious trouble. (If you do it through margin trading, it's still very risky, but not nearly as risky as trying to game the system. In some cases, doing this makes you not only civilly but criminally liable.) The lending bank absolutely can lose if your stocks tank, since then there will be nothing backing up the loan." This is a gross simplification as there are a few different ways to do this. The principle overall is the same though. To short a stock, you borrow X shares from a third party and sell them at the current price. You now owe the lender X shares but have the proceeds from the sale. If the share price falls you can buy back those shares at the new lower price, return them to the lender and pocket the difference. The risk comes when the share price goes the other way, you now owe the lender the new value of the shares, so have to find some way to cover the difference. This happened a while back when Porsche made a fortune buying shares in Volkswagen from short sellers, and the price unexpectedly rose. "My take on this is that with any short-selling contract you are engaging in, at a specified time in the future you will need to transfer ownership of the item(s) you sold to the buyer. Whether you own the item(s) or in your case you will buy your friend's used  car in the meantime (or dig enough gold out of the ground - in the case of hedging a commodity exposure) is a matter of ""trust"". Hence there is normally some form of margin or credit-line involved to cover for you failing to deliver on expiry."