McGraw-Hill

11. We assume a futures margin of 4 percent. The futures margin is
currently set at $12,500 per contract, so the percentage margin wil
rise and fall with changes in the contract's value.
12. For shorted shares selling at $5.00 or more, collateral must equal the
greater of $5.00 or 30 percent of share value, while for shorted shares
selling at less than $5.00, collateral must equal the, greater of $2.50 or
share price.
13. Alternatively, the investor could deposit additional funds to meet
the margin call.
14. One also occasionally hears about a "short squeeze," in which
speculators buy up lendable stock
force a buy-in at elevated
prices. This wilbe more of a problem for dedicated short-sellers
who take concentrated positions in illiquid stocks than for a longshort
investor holding small positions diversified across many
stocks.
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